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Savings, whether sector saving, private sector enterprises saving or household are influenced by multiplicity of macro -economic variable in particular household. Savings are influenced and determined by the level of income. The accepted minimum living standard, inflationary expectations, taxation, the level of interest rates and not a least by confidence in the saving system. Other factors that may influence the size of household savings are the availability and potentials of savings instrument, their merits and demerits and inducement to potential saver.

It is problematic estimating what subject should be given to each of the variable or established any firm generalization about the savings habit.

Nevertheless, it is clear that the relationship between the level of interest rates and financial institutions and instruments on the other hand, and the savers and users of savings on the other hand are very crucial.

For individual or household saving can be defined as that disposable income which is not spent on consumption.  For the nation at large, the definition of savings is slightly more complex. It would not be correct to simply. Subtract consumer expenditure form national income arid call the remainder saving because this would make no allowance for the collective consumption represented in the public authorizes expenditure on goods and services.

Saving habit can be defined as the saving habit of an individual as the usual behaviour of saving money or disposable income which is spent on investment for future used. Most especially during old age (retirement purpose business formation, security purpose e.t.c saving habit has become a reaction of an individuals objectives, a desire of possession in life.

In fact saving habit accrues more benefit to the individual than to the overall economy. It is critical to households both in developing and developed countries. This is because savings smoothen consumption in the face of volatile income. As stores of resources, savings are useful for wide range of purpose. Without it income shock could leaves permanents scare on households. There are some life — events that require planning’s and savings in Nigeria, individuals often do not seems to understand how or why they should save a greater amount of low income groups and those in the formal sector of the economy have no saving at all.

Those of them that save maintain only short — term thrift collection which can only be used to finance day to day needs. It is pertinent to mention that poverty does explain the savings habit among the low income group. However, it is true that one of the reasons for low savings rate is the persistent increase in the price level which has increased transaction demand for money and hence reduced the level of saving. Thus explanation tends to focus primarily or the relationship between saving and its major relevance of some other income determination of savings but only few attempts have been made to thoroughly investigate. The study therefore intends to investigate the saving habit.

Several writers on the soviet household savings habit (1954 - 1971) has observed that the annual percentage increase in income they concluded from this that soviet household are saving larger and larger fractions of their income and that this saving is undesired and reflects the growing ability of the planners to provide adequate amounts of desired consumer goods, particularly of quality consumer goods which are durable.

Recently empirical work undertaken in certain countries by the World Bank indicated that the mobilization of financial institution in Nigeria. The primary role of the financial system is the mobilization and allocation of capital in the economy that is to satisfy the diverse needs of ultimate borrower and lenders in the economy. In such an economy where there is no financial system to mobilize and perform the capital allocative role, investment and economic growth in hardly possible on every individual must save up all he needs to invest, all alone. Still, a better system is one that has financial institutions such as banks that take deposit and have a good payment system. In this case, there will be division of labour. Households will hire their services to the business firms in return for wages and salaries while the business firms will produce goods and services for the households to purchase, using their wages. The households will have the opportunity to save part of their income as there are banks that will facilitate this. The banks will be able to mobilize the savings of the households and channel their to the business units as loans.


The problem to be investigated is the extent to which economic growth could be facilitated by the effectiveness of rural saving mobilization using Isoko North area as a case study.

As a means of accomplishing the above objectives therefore major attention should be paid to economic factors that will flow across the communities. In the modern world, savings are as important to the corporate world and the general government, as they are to household because saving provides independents and allow the savers to plan for the future as well as secure investment for enhanced production and growth in the communities.

How level of capital formation in Nigeria has been saved to be responsible for the low growth rate in the economy, but in spite of this awareness, the rate of saving has not grown rapidly enough.

Hence in this research work therefore, the problems include the following:

1. High incidence of poverty and low income.

2. Unfavourable economic environment characterized by high unemployment and inflation.

3. The level of consumption in the household.

4. Another problem is that people do not seem to know how or why they should save.

5. Lack of confidence in the financial institution.


The purpose of this study is to examine a framework for encouraging saving in Nigeria.

Especially with respect to raising the people’s awareness of development in the country projects and opportunities, helping to foster attitude and motivation that contribute to development of countries and state as a whole.  A sustainable savings culture would go a long way in giving people assurance about the future.

This study will as well evaluate the influence or effectiveness of saving and investment in the development of the lsoko — North area.

Hence the study will take a look into the saving and control with a view of trying to encourage. People to save that is improving the saving administration.


This is a case study is aimed at documenting the savings habit of Isoko - North people.

The study would analyze the national savings method that current exit in the area arid the interest rate payable.

The study because of time and financial constraint was restricted to just one particular area which is the Isoko — North area. It hoped that any finding from this study would contribute to the communities.


This research work significance in various ways, it will become increasingly necessary to encourage savings and ensure sustained welfare of people throughout their lifetime, especially in old age.

However this study is more than necessary to change the social attitude and establish a framework that would ensure a lifetime savings habit of the people, household savings are an important source of capital to fund investment and growth in the economy.

Moreover, it is my aim to prefer solution and recommendation that will help improve the rural communities in terms of their saving attitude. The short - term savings could provide the saver with a readily accessible reserve of funds to cope with any household emergency.

Finally this research work is also significance in that it will help as well as serve as a guide for further researcher in this filed and related field.


In the course of carrying out the research work certain questions are needed to be asked. The research questions are as follows.

1.   What is the importance of saving?

2.   In what ways do the rural people save?

3.   What are some of the instrument used to mobilize savings?

4.   What financial institutions exist in the rural areas?

5.   How can the people engage in saving?

6.   Does the high population of the country leads to’ poor saving?

7.   What are the barriers to saving in the rural areas of Nigeria?

8.   Do poor incomes of the people lead to poor saving?


The scope of this research is limited to the study of the saving habit of (Isoko-North people). In this circumstance, the saving culture will be examined and evaluated.

Financial Constraint

As one limitation which nearly hampered the effort of this research. The costs of things generally have risen to a alarming height and hence that of producing this project would not been an exception.

Time Constraint

As a result of the fact that we the students were not free at every hour of the day, it was really hard waiting for long time for an interview with some of the people in the area. The unwelcome attitude of some of the respondent proved too inimical and uncivilized.

Due to the above and host of other factors, this study is precise, conclusive or exhausting, some authors see it as impossible to measure the effectiveness of the saving culture among the people.


Some of the terms that are used in the course of making this research work are defined below for ease of understanding to the reader of this research work.

1.     Saving:- An amount of money that is use or spend or save in the bank for future use.

2.     Investment:- It is the act of investing money, time or something in order to make profit e.g shares, bond e.t.c.

3.     Income:- The money an individual earn from work investing money, business over a given period of time.

4.     Inflation:- It is a general rise in the price of goods and services in a particular country resulting in fall in the value of money the rate at which it happen.

5.     Consumption:- The act of using energy, food or material the amount used.

6.     Interest Rate:- The real interest rate is the reward for saving, it is the rate at which the real purchasing power of a financial asset increases overtime. It is also the rate of returns on saving.

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