Abstract:
Savings are current income not spent but kept for future use or the accumulation of
financial and non-financial assets. They are mobilized by the financial sector, which
allocates them for productive use in the economy. This paper sought to examine the
impact of saving practices on the performance of the economy in Zimbabwe from 1980
to 2015. A mixed research approach was used to establish the effect of saving practices
on the performance of the economy. Both primary and secondary data were employed
for analysis and testing of hypotheses. Hypothesis testing, correlation analysis and
regression analysis were used to examine the impact of saving practices on the
performance of the economy using some macroeconomic variables. Two hundred
depositors randomly selected from various banking institutions from the ten provinces
and 114 key informants were used in the investigation. Secondary data on gross
domestic product (GDP), total deposits, total liabilities, gross capital formation and net
exports were used in the examination of saving practices. The study found that savings
were always below the average and the Zimbabwean majority across genders had a
formal bank or mobile account. Predominantly, savings are used for transactional
purposes, thus creating a wasteful economy. Apart from product/service broadening
and deepening, there is a need for robust legal and policy frameworks that will promote
a savings culture.
