Micro-savings, Savings culture, Thrift, Financial institution, Savings theory, Financial inclusion, Low-income group


Nigerians generally do not seem to have what is usually referred to as “the saving culture”. This assertion may not entirely be true as it based on information from the formal banking system without recourse to the savings activities at the informal sector of the economy. It is a fact that the informal sector of the economy is large with unrecorded transactions. Consequently, this paper attempts to examine the fundamental issues in saving and thereafter design a formal savings habit of the populace, especially the low-income group. The framework is designed to mobilise micro-savings, hitherto kept with thrift collectors and roll it over gradually till old age. The paper is divided into six sections. Following the introduction, section two expounds theoretical issues in savings and presents all relevant theories on savings. Section three describes the experience of other jurisdictions in encouraging and mobilising micro savings. The study concludes that: the informal sector of the economy consists mainly of low-income group who desire to save for different reasons. These could include saving to finance a specific project, to ensure smoothened consumption, or to guarantee quality welfare at old age. Most of these individuals, however, make only very short-term informal savings either with deposit/thrift collectors or through rotational savings. This is basically due to low transaction cost and the pressure which ensures deposit discipline.

Author Bio

The author are staff of Central Bank of Nigeria. Nigeria.

Publication Title

CBN Bullion







To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.