The effect of saving mobilization to the level of investments to the tea farmers in Gatanga district, Murang'a County, Kenya.
Ngugi, James Njuguna.
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The need to have adequate savings and investment necessitated this study. A high saving economy accumulates assets faster and thus grows faster than a low saving economy. Kenya's vision 2030 for financial services is to create a successful and globally competitive financial sector that promotes high levels of saving and financing for Kenya's investment needs. This vision can be fully achieved if financial institutions in Kenya can improve the savings hence investment level of their members. This study therefore, sought to determine the effect of saving mobilization and the level of investment to the tea farmers in Gatanga District. The specific objectives of the study were to determine the relationship between consumption, savings and level of investment; establish how the level of income affects savings and investment by the tea fanners; find out the role of financial literacy in mobilizing savings and the level of investment; analyze the extent to which government initiatives support savings and investment among the tea farmers. The study adopted a descriptive statistics and Pearson correlation analysis as the analytical tools. A population of 15000 tea farmers from Njunu and Ngere tea factories in the district was targeted. Simple randomsampling was used to select a random sample of 20 tea collection centers and then multi-stage and purposive sampling to select 234 farmers as the respondents. Questionnaire was used to collect the data and was administered in person to the tea fanners at their convenient places. The data presentation techniques employed are Pie charts, Bar graphs and line graphs. The study showed that 9()0/& of the farmeJs have no financial literacy, 91.5% see no need to save with 65.4% of the farmers having a saving of below KES 100,000 for the last 2 years. 9()0/& of the farmers have no other source of income which indicates low investment. The results of the correlation analysis shows a negative correlation between consumption, and the level of saving and investment ie (-0.631. p<0.05). The conclusion drawn was that saving potential exists among the tea farmers in the district. The result revealed that income and financial literacy was the most important determinant of savings as well as investment..Some of the factors found to exert significant influences on the level of savings and investment include income, level of consumption, access to loan facilities and the rate of interest on loans. The study also showed that there was inadequate savings and investment by the fanners in the area. Therefore, efforts to mobilizing savings and investment among the tea farmers in the district and in Kenya as a whole need be directed at improving existing peaetiees within the government and the financial institutions. It can also be concluded that credit access has a net negative effect on saving such that; an improvement in credit access will cause a reduction in saving, and vice versa hence any small improvement would significantly have an impact on saving. The study recommended that effurts designed to accelerate the level of savings and investment should be geared toward raising income, increasing financial literacy, reducing consumption and controlling the rate of interest on loans. Seeoed, mass education and promotional programme are desirable to mobilize savings and investment across socio-economic strata in the society and also intimate farmers on the advantages of diversifying their investments and educating them on the various investment opportunities for them to invest wisely.