The Comparative Effects of Interest Rates and Non-Price Factors on Rural Savings Supply among Rural Women Farmers in Manyu, Province of Southwest Cameroon

This study was conducted to critically examine the effects of interest rates and non-price factors on rural savings supply among women farmers in Cameroon, with particular reference to Manyu Division. The study was carried out as a result of persistent shortage of credit to rural farmers in Cameroon, despite the introduction of various schemes and policies. It was suspected that this situation might depend to some extent on the poor planning and ineffective execution of the schemes and policies, but more importantly on shortage of savings in the rural areas where a reasonable percentage of food consumed in this country are produced. The orientation of this study was guided by nine hypotheses.
A random sample of 200 farmers was made comprising 100 femaleheaded and 100 male-headed households. Purposive sampling techniques were used to select 20 formal and 20 informal financial institutions. Primary and secondary data were analysed using multiple regression model, t-tests model, chow tests model and descriptive statistics.
The major findings were that the characteristics of savings institution varied across formal and informal financial institutions, informal institution received higher patronage than formal institution. The study noted that although financial savings consistently increasing over the years in nominal terms, the trend was decreasing in real terms. The study showed that
although male-headed households recorded a higher percentage of financial savings than female-headed households, female-headed households' recorded a higher percentage of savings in informal financial institutions than male-headed households.
The study also noted that non-financial savings dominated savings in rural areas. However, the study noted that although rural savings were more determined by non-price factors than interest rates, interest rates had Jess influence on total financial savings than those of savings in informal financial institutions.
The study also noted that the major non-price determinants of rural financial savings were level of education, farm income, average propensity to consume, dependency ratio and distance to informal financial institution; while non-financial savings was influenced by income, dependency ratio, family size, and average propensity to consume. There were differences in the non-price determinants of male-headed and female-headed households' financial savings, non-financial savings, and total savings.
The recommendations, among other things, were that formal financial institutions effort should be made by formal financial institutions to reduce bureaucratic processes involved in lodging, withdrawing and lending money to farmers. Encouraging closer contacts with other informal financial institutions would strengthen the institution's managerial ability, thus making
it sustainable. The feeble response of rural deposit to interest rates calls for liberalization of interest rate especially in formal financial institutions. Workshops should be organized for both formal and informal financial institutions to strengthen their performance and correct their weaknesses.