Predictors Of Saving Behavior Of Households In Case Of Mettu Town, Ilubabor, Oromia, Ethiopia, 2018

Introduction: The household saving rate is calculated by dividing household savings by household disposable income. A negative savings rate indicates that a household spends more than it receives as regular income and finances some of the expenditure either by incurring debt or through gains arising from the sale of assets. From the classical times, saving has been considered as one of the determinants of growth. Objectives: The aim of this study is determining factor that affect saving behavior of households in Metu town. Methods: In this study the researcher uses cross-sectional study design and applied self-administered questionnaires to collects data to make inferences about a population of interest at one point in time. The source of data is primary source and the target population of this study was covers list of households of Metu town which contains 3 kebeles and random sampling method were applied to select representative sample form for the total population of household. The researcher is primarily used based on quantitative research, which constructed regression model to identify and measure the predictors of saving households behavior in the study area. Results: From descriptive analysis the average amount of household saving monthly is 852.97 birr per month and almost 49.3 percent of households were involved in saving. According to descriptive statistics of the sample households, the highest percentage of income of households was observed greater than 6,000ETB (27.9 percent) followed by in between 4,801 to 6,000ETB (20.5 percent) and 3601 to 4800ETB (20.2 percent). On the other hand, the lowest percentage of income of households was recorded in between 2,401 to 3,600ETB (13.9 percent), 1201-2400ETB (12.5 percent) and followed by households income which is less than 1,200birr (5.0 percent). Hence, there appears to be some variation in proportion of income of household’s heads in Metu town during the study period. Concussion: Income of the household head, working status of household heads, housing status of household heads, household size, and encouragements to save their income were found the major predictors that affects saving behavior households during the study period. It is also recommended to conduct a study that compares status of saving behavior in rural households with urban households.