Final answer:
A factor that limits the amount of saving in developing countries is the fact that the banking system does not encourage saving. Option D is correct.
Step-by-step explanation:
A factor that limits the amount of saving in developing countries is the fact that the banking system does not encourage saving. In these countries, people may not have access to adequate financial services like savings accounts or may face high fees and interest rates, which discourages them from saving. As a result, they may not have the necessary funds to invest in their own economic development.
For example, in some developing countries, banks may require large minimum deposits or collateral for savings accounts, making it difficult for individuals with limited resources to participate in the formal banking system. Instead, people may resort to informal saving methods like stashing cash at home or investing in livestock, which may not be as secure or productive.
To address this issue, governments and financial institutions in developing countries can implement policies and initiatives to promote financial inclusion and incentivize saving. This could include reducing barriers to access formal financial services, providing financial education and literacy programs, and offering incentives such as interest rate subsidies or tax benefits for savers.
In these countries, people may not have access to adequate financial services like savings accounts or may face high fees and interest rates, which discourages them from saving. To address this issue, governments and financial institutions can implement policies and initiatives to promote financial inclusion and incentivize saving.