| Abstract: | In formulating strategy on how to boost saving deposits and employee retention
programs Banks shall understand the effect of income, inflation, loan, customer
number and other determinant factors of saving behavior. Similarly, in designing
policies to promote savings and investment, which in turn enhances economic
growth through capital formation, understanding the nature of savings behavior is
critically important. This paper examines the Impact salary and staff loan have on
employees savings deposit status. This study is undertaken in Oromia International
Bank s.c. The researcher used both qualitative and quantitative data collected
from randomly selected respondents and Oromia International Bank records. Also,
the researcher adopted Qualitative and Quantitative research approaches.
Different multiple regression analysis diagnostic tests (test for assumption of
Homoscedasticity, Autocorrelation, Normality, and independent variables are nonstochastic)
were conducted to check the appropriateness of the model. The
conceptual framework for this study is originally derived from Life-Cycle model
and appropriately modified to accommodate the peculiarities of a developing
country and builds on the existing cross-country literature on Impact of salary on
savings deposit. The study implies that salary amount has a positive relationship
with savings deposit. It is the most important factor that affects savings deposit
growth from the two independent variables. The research recommends that
employers have to consider the impact of salary amount and staff loans on saving
capacity of their employees while deciding salary amounts for their employees and
providing loans. |
