Vol. 5, Issue 1, Part A (2023)

This review paper examines the impact of remittances on domestic savings rates in Ethiopia, a topic of significant economic and developmental importance. Despite the increasing flow of remittances to Ethiopia, their effect on the financial behavior of households, particularly in terms of savings rates, remains underexplored. Through a comprehensive analysis of existing literature, this study aims to synthesize empirical findings, identify gaps in current research, and highlight the mechanisms through which remittances influence savings behaviors. Preliminary insights suggest that remittances play a multifaceted role, potentially enhancing savings rates through direct financial contributions to households and indirectly by influencing economic stability and access to financial services. This review further seeks to understand the implications of these dynamics for economic policy and financial planning in Ethiopia.