Journal of Economics and Sustainable Development www.iiste.org ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online) Vol.8, No.6, 2017 7 An Empirical Analysis of the Determinants of Saving Behaviour by Households in Ho, Ghana: A Case Study of Ho Municipality, An Individual Level Analysis Emmanuel Mensahklo School of Business, E.P. University College,PO box HP 678, Ho, Ghana Daniel Delali Kornu School of Business, E.P. University College,PO box HP 678, Ho, Ghana Bernard Dom School of Business, E.P. University College,PO box HP 678, Ho, Ghana Abstract The study focused on the empirical analysis of the determinants of savings behaviour by households in Ghana. The population consisted of individuals who constitute the employees and management, customers, market men, and women of some selected financial intermediaries in the Ho Municipality of the Volta Region of Ghana. A sample size of 152 was drawn from the population using the probability and non-probability sampling techniques. Descriptive and inferential statistics were used to analyse the data collected. The findings showed that, in general, majority of the individuals save with the financial institution in the Ho municipality. It also showed that many individuals’ choice of the financial institutions was encouraged by interest rates. It was also realized that, majority of the individuals within the Ho municipality has fewer dependents and this promotes saving behaviour in the Ho municipality. Also, in the findings, it was revealed that majority of individuals used the Automated Teller Machines (ATMs) to either withdraw or deposit and this encourages other individuals to save with the financial institutions. However, the study concluded that the determinants of saving behaviour vary from person to person as they have diversified purposes of saving and consuming money. It was recommended that financial institutions in the Ho municipality should publicize their services to create awareness in the public domain and train them on how to use the Automated Teller Machines (ATMs). Also, the study recommended that individuals must plan their expenditure against their income and join fewer social groups to have enough income to save. Keywords: Expenditure, Propensity to Consume, 1. Introduction 1.1 Background of the Study Globally, the demographically-induced fall in saving within the industrial economies will be less disruptive than often assumed because of a similar offsetting decline in investment requirements. The rapid development of a global capital market provides an important means of accommodating the change (Smith, 2005). The current economic conditions in Africa have adversely affected most African families both rural and urban, with the rural families being the worst affected, resulting in high levels of poverty and, therefore, low levels of saving and investment. Ziorklui and Barbie (2007) observed that, in Africa, there are no hard and fast rules on the determination of how well national and domestic saving should perform in any given year. In Ghana and most developing parts of the world, families find it difficult or almost impossible to save due to low levels of incomes (Boateng, 2004). The low incomes of Ghanaian families are due primarily to the low levels of economic growth coupled with other factors such as illiteracy, political instability coupled with high propensity to consume. Quartey and Blankson (2006) found that the low saving in Ghana could be due to the inadequate financial intermediaries as well as low incomes of the populace. Rural families in Ghana are mostly peasant farmers, fishermen and petty traders in mainly agricultural products. This implies that a large percentage of their incomes are used only to meet basic needs. For households to be able to save and invest, they need to have excess income after meeting life‘s basic necessities. Households, will therefore, spend mostly the permanent part (income that is used to meet basic life necessities) of their income while the transitory part (the income left after basic needs have been met) is channeled into saving and subsequently investment. That is to say that before a family decides to put some money aside for future use and into productive ventures, the family might have met the basic needs of its members. 1.2 Statement of the Problem In Ghana, saving behaviour is mostly dependent on income level of the citizenry and their rate of consumption. Also, the geographical location of individuals with the same level of income may have different saving patterns due to their cost of living. Moreover, interests paid on saving are not that significant, while annual interest rates CORE Metadata, citation and similar papers at core.ac.uk Provided by International Institute for Science, Technology and Education (IISTE): E-Journals