Factors influencing Savings
The level of disposable income. Savings depend on the income of consumers after income taxes have been paid. Savings will be high when disposable income is high and will fall when disposing income is falling. It should be noted that the proportion of income that is saved increases as income rises. Government taxation policy. Saving is made out of disposable income which depends on the rate of direct taxation. An increase in the rate of direct taxation will reduce disposing income leading to a fall in the level of saving. When direct taxes are reduced disposable income will increase and saving will also increase. The availability of financial institutions. The existence of commercial banks, saving banks, insurance companies and other micro financial institutions like credit unions, Njangi houses facilitate saving in an economy. It also depends on how these financial institutions are widely known, accessible and have confidence in the people. The rate of int...