Savings Habit Among Individuals in the Informal Sector: A Case Study of Gbegbeyishie Fishing Community in Ghana

Abstract

AbstactSavings among individuals in the informal sector is imperatively expedient if they are to have any decent and comfortable living conditions at retirement as savings in the informal sector become the obvious substitute for formal pensions. However, much is not known regarding the savings habits of informal sector, particularly, the fishing communities in Ghana. Apparently, this study investigates into the determinants of savings habit of the informal sector in Ghana, using the case of the Gbegbeyishie Fishing community. The data for the study was obtained through administering questionnaires and interviewing targeted respondents. A 120 sample size was randomly drawn from Gbegbeyishie fishing community in Ghana. This study employs the probit model in estimating the determinants of savings in the informal sector. SPSS and STATA statistical packages were employed in descriptive analysis and estimation of the probit model respectively.It is glaring in this study that age, gender and income are statistically significant conditions for savings in the informal sector. It is also evincing in this study that Age has a significant negative effect on savings and aging decreases the propensity to save by 0.1577656. On the other hand, income has statistically significant positive effect on savings and that a one unit change in the income variable increases the propensity to save by 0.1292502. Also, the probability for a male, all other factors held constant, to save is higher than for a female to save and being a man increases the propensity to save by 0.2024894. The study also revealed that the main hindrance to savings in the Gbegbeyishie Fishing Community is Low income.As a result, the authors recommend that men and married people should be targeted whiles paying little attention to the aged in stimulating savings among fishing communities in Ghana. Educational programs could also be organized for the workers in the informal sector as most of the workers have no education which could hinder their income earning capacity and for that matter savings. Further research could also be engineered to consider macro-economic conditions for savings habit in Ghana.

Drivers of Savings Account Ownership Status: A Cross-Sectional Analysis from Ghana

“…Theoretically, an individual's utility (satisfaction) is hypothesised to be a function of consumption and saving (Addai et al, 2017). Thus, the life-cycle and the permanent income hypotheses have emphasized long-term consumption motives in support of savings decision.…”

“…In spite of the efforts to ensure a sound financial system which encourages savings, it is perceived that barriers to savings exist for the poor thus, discouraging many informal business owners to save. The situation, particularly in Ghana is serious; since savings habits among the informal sector have been found to be depressing leading to wanton misery among the informal sector workers (Addai et al, 2017).…”

Influence of Job Related Factors on Encouraging Savings for Health Care towards Old Age among Nurses in a Municipality, Ghana

“…Other psychological and sociological proposals adopt that saving-related preferences and objectives are not fixed and describe how reasons, goals and potentials are formed (Addai et al, 2017). It was acknowledged by are rational and well-informed since behavioural theory tries to clarify the behaviour of human beings as human and not automatically as rational beings (Addai et al, 2017). The context of this study was that job-related factors would determine whether the individual would make savings for healthcare towards old age.…”

“…Banks et al (1998) notes that psychological and sociological theories of saving consider further determining factors of saving and asset accumulation including character, incentives, aspirations, expectations and peer and family influences. Other psychological and sociological proposals adopt that saving-related preferences and objectives are not fixed and describe how reasons, goals and potentials are formed (Addai et al, 2017). It was acknowledged by are rational and well-informed since behavioural theory tries to clarify the behaviour of human beings as human and not automatically as rational beings (Addai et al, 2017).…”

“…This research sought to determine the influence of job-related factors on savings for health care towards old age among nurses in a municipality in the Greater Accra Region. This paper suggests that policy makers, especially the Ministry of Health, Ghana Health Service, Ghana Education Service and Ministry of A research shows that in Ghana, low-income levels, high dependency ratio, high expenditure and poor financial management are some of the challenges of savings (Addai et al, 2017). They explained that the reasons for savings include children's needs, buying of assets, investment and building a house for retirement and as security.…”