Comparative Analysis of Savings Behaviour of Rural and Urban Farm Households in Umuahia Agricultural Zone of Abia State, Nigeria

This study comparatively analyzed savings behaviour of rural and urban farm households in Umuahia Agricultural Zone of Abia State, Nigeria. Purposive and multistage random sampling techniques were employed in selecting 120 rural farm households and 120 urban farm households from whom data were collected using structured questionnaire. Data were analyzed using descriptive statistics, z-test and probit regression model. Results showed that mean farm size of rural and urban farm households were 1.26 hectares and 0.65 hectares respectively. Mean annual farm income of rural and urban farm households were 230,566.47 Naira and 174,715.21 Naira respectively. However, rural farm households saved mean amount of 52,605.68 Naira per annum, while, urban farm households saved mean amount of 93,421.24 Naira per annum. About 31.67% of the rural farm households and 61.67% of the urban farm households saved cash in commercial banks. Z-test analysis revealed that urban farm households saved significantly higher amount annually. Results of probit regression analysis showed that age, number of dependents, education level, degree of farming and gross income were significant determinants of saving behaviour of both rural and urban farm households. Membership of farmer’s association influenced only saving behaviour of rural farm households. Large proportions (68.33% and 60.00%) of rural and urban farm households respectively were constrained to save by inadequate income. Farm households in rural and urban areas should be encouraged and enlightened on the need and importance of savings to economic growth. Non-Governmental Organizations should organize awareness and capacity building oriented programmes at community level and enlighten farmers on the benefits of saving.