Factors that influence savings of small scale tea farmers in Kericho town- Kenya
Abstract
Saving has been a challenge to a lot of people since time in memorial. The tea business is a
thriving industry in Kenya considering that tea has a huge market in Europe, Asia, and some
parts of Africa e.g. Egypt. It is believed that the tea farmers are casualties when it comes to the
aspect of putting their proceeds into good use and hence they have not really embraced the
savings discipline.
Most studies have not been conclusive on the factors that influence savings among various
individuals and households especially in the developing countries. The purposive explanatory
survey was conducted in Kericho town where factors that influence savings among Kericho town
based tea farmers were being investigated. Primary data was collected from a sample of 190 tea
growers, purposively selected using cluster sampling technique. Through the application of
principal and component analysis and frequency distribution analysis the finding was that the
majority of the respondents viewed dependency ratio, income, access to credit and access to
Sacco as influencing their decision to save to a very great extent. Age, gender and tax were seen
to have no effect on influencing the tea growers’ decision to save. Interest rate as a factor had
two extreme views where an equal percentage viewed it as a factor that influence their saving
decision to a very great extent and a similar percentage viewed it as not influencing their saving
decision. Other common factors that positively influence the growers’ decision to save include
the desire to expand businesses, retirement needs, school fees and emergency needs.
The study concluded that various factors that influence individuals or household decisions to
save have varying effects in different settings. There are no factors that are cast in stone to cut
across the board that can be conclusively generalised to have the same effect on individuals of all
walks of life.
This study is of value to policy makers on economic issues and brings attention to the
government on the levels of savings among this sector of the society. Decision makers in the
financial services industry can also take advantage of the findings. The study recommends a
wider scope survey covering the whole country to assess the factors that influence saving among
tea farmers on a national level and an assessment of savings discipline among the farmers.
Publisher
University of Nairobi
Description
Masters