A Comparative Study on the Determinants of Household Savings in the Colombo District

P.J. Kumarasinghe, C.P.A. Jayasinghe



The saving rate in Sri Lanka remains low and most of the studies have not been conclusive on factors influencing in savings in developing countries. The policy makers’ understanding on household financial decision-making is important for the design of social welfare and consumer policy and household economic decisions about saving and spending are of interest to credit institutions, which should provide households with adequate financial services. This study adopted a micro economic approach in investing the factors that influence savings among household of farmers, teachers and entrepreneurs in Colombo district. The sample composed of 90 farmers, teachers and entrepreneurs which was selected through convenience sampling under the non-probability sampling technique. To collect the primary data from the units of sample the researcher used survey method. This study used basically four main factors of demographic, socio economic, income and individual factors to test the determinants of household savings. The main findings of this study was household savings are determined by socio economic factors, income factors and individual factors while demographic factors do not show significant association with level of savings.

Keywords: Determinants of Savings, Socio Economic Factors, Income Factors and Individual Factors

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Faculty of Management Studies & Commerce