Over time, ethics, and culture in shopping habits have kept on increasing with respect to society and the economy. In some developing countries, due to the absence of efficient credit and insurance markets, savings are a crucial determinant of an entrepreneurial growth. Despite the many benefits accrued to savings, some entrepreneurs have been considered not to save enough because of their shopping habits.
Many entrepreneurs often do not seem to understand how or why they should save and this is particularly the case of small-scale entrepreneurs in society.
A greater amount of them have no savings at all. Those of them that save maintain only short-term thrift collection which can only be used to finance day to day needs. It is pertinent to mention that poverty does explain the shopping habit among the small income group.
The explanation lies in the lack of financial education in the society as a whole reinforced by inadequate incentives to save.
Given the many benefits (both to the individual and to society as a whole) that savings can bring, there must be serious reasons why people do not save enough rather they use whatever they have for shopping (buying liabilities more than assets).
The following are some of the factors that may be responsible for shopping rather than saving.
#1 - Many people feel that the risks and difficulties of saving outweigh the risks and difficulties of not saving, therefore, they use their income on shopping.
#2 - People often do not seem to understand how and why they should save when their income barely solves their immediate problem.
#3 - Lack of confidence in financial institutions. The distress in the financial sector has discouraged most of the entrepreneurs from saving so they spend most of their income on shopping.
#4 - High independence of poverty and how nominal disposal income because of the unfavorable economic environment characterized by high unemployment and inflation. In essence, the little income will be used for shopping.
#5 - Most entrepreneurs do not even possess the necessary identification requirement to open an account. This encourages shopping.
#6 - the Considerable number of entrepreneurs find saving to be boring and difficult hence they do not want to pay for financial advice.
“More than half of the consumers surveyed stated it was important to establish a personal relationship with a sales associate whether online or in-store.”
