Individual Savings Problems - An Analysis of Commercial Banks in Tanzania: Evidence from CRDB Bank Marangu Branch

Ansgar J. Sakaya, Lyimo, Joshua Amani


This study examines the reasons as to why people do not save. A survey design was employed on 130 respondents of CRDB Bank Marangu Branch. Purposive and random sampling techniques, questionnaire and Interview method were used for data collection. Again, data were analysed descriptively.

Results of the study found that, CRDB bank has not yet been effective in the creation of financial capability and training programmes that would teach people best practices, such as basic budgeting, and separating money saved for different goals and uses. Individuals were found to have negative attitude toward saving with Bank due to opening and operating cost of the account. The efforts and resources placed by CRDB Bank in promoting savings are high compared to the saving rate as most of the opened accounts become dormant in one year after been opened and most of products available with the branch are not known well by majority, in hand with that, most of People residing in Marangu are low income earners and therefore they save much of their earnings informally and at shorter intermittent level. Lastly, interest rates and individual income were seen to impact levels of saving habit.

Moreover, the study suggested that, bank staff need to be assisted in realizing their role in mobilizing individual saving, the bank should also create awareness to public on saving plan, a regular snap check of account opened, existing one to ensure their activeness and provide reason for any inactive account, as well as design new products or facility to promote savings, review cost, procedures and interest rates. Again the bank should motivate individual habit of participating in financial education workshops as well as promoting individual saving habit programmes by the bank to Primary, Secondary, College and University students to help them grow with the mentality of saving. The policy makers should try to sensitize the rural people of Marangu to diversify some of their land uses into non agricultural activities such as to conduct various business activities that would guarantee income generation so as to increase saving rate. The bank should design adverts demonstrating the value of having savings for the purpose of changing rural people’s attitude towards saving.

Keywords: Saving attitude, Commercial Banks

DOI: 10.7176/EJBM/11-11-07

Publication date: April 30th 2019

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