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Abstract:
Saving is one of the essential types of household's economic activities (Zhuk, M. (2015). Savings play a critical role in an economy in many developing countries which has limited avenues for financing investment projects (Narayan, and Narayan, 2006) and gives the independence, security and comfort to people's lives encouraging people to save, especially among lower-income earners (Kempson et al., 2005). Undoubtedly, savings provide safety for a household in the sense of future uncertainty (Zhuk, M. (2015). High savings would stimulate country's investment for a rapid economic growth (Narayan, and Narayan, 2006) which is a vital factor to the investment to achieve the development targets. Nevertheless the household saving is the most significant component of domestic saving in less developed countries, and an appropriate mechanism would build a healthy saving level to generate economic activities in the country (Obayelu, u.d.) but South Asian savings mainly determined by income, access to banking institutions, savings and dependency rate (Agrawal et al., 2008). Governments have been implementing more measures to ensure savings and delivery of financial services to Sri Lankans for strengthening their savings and enable entrepreneurs to use the same for their investment. Saving behaviour is the combination of perceptions of future needs, a saving decision and a saving action. Saving behaviour can also be defined as the act or manner of an individual in reducing expenditures (Thung et al. 2012). Nonetheless, undergraduates are part of society and their actions on savings, improvements of savings, saving behaviours and the savings habits directly impact the domestic and national savings, but the saving behaviour of younger people including university undergraduate has been a neglected area (Otta, A, 2009) in many countries including Sri Lanka. The university students are the category which is due on their significant future contribution to a country (Thung, C., M. et al. ,2012) in many ways including savings but need those students having the high self-control to save more (Syahrom, N. S. et al., 2017). Therefore, this study is relevant and timely because findings of this would guide policymakers and institutions to identify drawbacks and effectiveness of current mechanisms for savings which affected the society as a whole. This study is based on a cross-sectional data collected by a questionnaire survey on saving behaviour based on the theories of Keynes saving motives (Zhuk, M., 2015; Keynes, 1936; Xiao, j. J. and Fan, J, X, 2002, Canova, L., Rattazzi, A. M. M., and Paul Webley, P., 2005) and theory of planned behaviour (Ajzen I., 1991) of undergraduates saving behaviour. A stratified sample of undergraduates was selected and gathered primary data from a national university in Sri Lanka. The results of Probit regression analysis which used to test hypothesis reveals that savings behaviour of undergraduates are at very low level and some psychological and socio-economic factors would make a significant influence on undergraduates savings. The willingness and motivation to save likely to be improved when required prerequisite for savings are fulfilled.
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