Factors Influencing Saving Behaviour and Capital Formation Among Rural Households in Kalambo District, Tanzania
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This study was carried out with the objectives of determining factors influencing saving behaviour and capital formation among rural households in Kalambo district in Tanzania. Specific objectives of the study were; to determine the rates of savings and capital formation among rural households; to identify key determinants of saving behaviour and capital formation among rural households. Research design involved cross-sectional survey in the area which covered a sample of 362 out of 3,911 households. Data were analysed for descriptive statistics and inferential statistics using STATA software version 13. Findings of the study revealed that average saving rate and capital formation rate among households were very low (3.8 and 8.2%, respectively), and majority of household heads (above 70%) had no bank accounts. Household savings increased significantly with increase in household income; marital status being single; having teacher’s college education; having vocational education and having secondary level of education. The effects were in line with prior expectations. Furthermore, with exception to tax rate, all other variables included in the model had significant effect on capital formation and most of them were as per prior expectations. Based on these findings, recommendations to improve the situation have been indicated.