DETERMINANTS OF SAVING DECISIONS AMONG MEMBERS OF MAASAI GROUP RANCHES IN KAJIADO COUNTY, KENYA: A CASE OF KUKU GROUP RANCHES

Abstract

Savings mobilization is an important element in determining the welfare of individuals and the society at large. There is usually a significant difference in the saving rates among countries and over time periods. National savings consists of personal savings, business savings and public savings. This study sought to establish the determinants of saving among members of Maasai Group Ranches in Kajiado County by considering the case of Kuku Group Ranches. The study specifically sought to establish if the level of income, availability of information, personal factors and market frictions influenced saving decisions among members of Maasai Group Ranches in Kajiado County. Mixed methods research design, which entails the use of quantitative and qualitative study approaches, was adopted. The population of interest was the 12,667 registered members of Kuku Group Ranches. Stratified random sampling was used and a sample of 384 registered members of Kuku Group Ranches was selected. Semi-structured questionnaires were administered to collect primary data, which was analysed using descriptive statistics alongside ordinary least squares regression. The study established that the level of income, availability of information and personal factors were positively and significantly related to saving decisions while market frictions were negatively and significantly related to saving decisions. This implies that an increase in the level of income leads to an increase in saving decisions. Majority of the respondents in this study earned above the set minimum daily wage in Kenya and were involved in some form of saving. Similarly, an increase in the availability of information leads to an increase in saving decisions. Majority of those interviewed in this study did not have sufficient information about formal saving products provided by financial institutions in Kenya. An improvement in personal factors such as level of education leads to an increase in saving decisions. Even though the majority of the respondents in this study possessed at least basic education, it was observed that they lacked basic financial literacy. An increase in market frictions such as transaction costs, lack of trust and regulatory barriers leads to a decrease in saving decisions. The majority of the respondents in this study deemed the fees charged to access and operate bank savings accounts in Kenya too high. Similarly, the requirements for opening and operating bank accounts were deemed too complicated by majority of those interviewed in this study. These findings were presented inform of graphs, charts and tables. The study recommended that members of Maasai Group Ranches should diversify their sources of income and methods of saving to avoid overreliance on livestock. They should also actively seek for financial information. In addition, the financial institutions in Kenya should provide basic financial literacy and financial products targeting members of Maasai Group Ranches. Finally the Government of Kenya should consider designing and implementing an incentive scheme to motivate financial institutions towards promoting financial inclusion policies. The incentive scheme could include granting of tax waivers to financial institutions that provide banking services to rural underserved communities at affordable costs.