ABSTRACT

This study examined the determinants of savings among farm households in Ikwuano L.G A of Abia State. It considered the socio-economic factors influencing the level of savings by rural farm households, determined their income and problems households encounter in trying to save. It also identified the factors, which constrain the level of savings and recommendations made with a view of deriving policy measures. A total of 96 respondents were randomly selected from 4 major clans in the local government and were interviewed orally and with the use of structured questionnaire. Analysis was done using simple statistic tools like tables, means, frequencies, percentages and regression analysis. Savings are very important in smoothing consumption at the household level. It was observed from the result that many factors constituted the reasons for saving which include; education, marriage, security, liquidity, business, housing, and transportation. The regression analysis showed that disposable income, level of education, tax, farm size, and assets were all significantly positive determinants of savings. The analysis showed that most farmers cultivated Farmlands below 2.9 hectares, which represents 69.79percent. The result showed that most farmers (73.96 percent) earned below N79, 000 per annum. A number of factors militated against savings by the farmers, which included the form of saving, where to save, low income and small size of farmlands. Recommendations were made on how to improve the level of savings of the farmers.