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An Analysis of Savings Among Rural Poor Households in Rwanda

  • Aristide ManirihoEmail author
  • Edouard Musabanganji
  • Philippe Lebailly
Chapter
Part of the Frontiers in African Business Research book series (FABR)

Abstract

A household’s savings are considered a primary source of investments which drive economic growth and development. This study identifies the determinants of private savings among poor rural households in Rwanda. It uses data from the 5th round of the Integrated Household Living Conditions surveys conducted in Rwanda every 4 years. It specifies a simultaneous equations model and does the estimations using the 2SLS method to account for missing variables and a possible correlation between some covariates and the error term, which is complemented with a T-test and correlation analysis. The results of the T-test show that savings among poor rural households are significantly positive. The econometric estimates show that in contrast with existing literature, income and all other forms of wealth are factors which do not influence the savings of poor rural households, while consumption is positively correlated with savings. We recommend that socioeconomic development programs, projects, and policies that aim at improving income and consumption levels thus affecting savings among poor rural households should be enhanced.

Keywords

Household’s savings Investments Rural poor Economic growth Economic development Rwanda 

JEL Classification Codes

D14 E41 O12 R20 

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Copyright information

© Springer Nature Singapore Pte Ltd. 2020

Authors and Affiliations

  • Aristide Maniriho
    • 1
    • 2
    Email author
  • Edouard Musabanganji
    • 2
  • Philippe Lebailly
    • 1
  1. 1.Unity of Economics and Rural Development, Gembloux Agro-Bio TechUniversity of LiègeLiègeBelgium
  2. 2.School of EconomicsUniversity of RwandaKigaliRwanda

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