The role of capital formation in the process of economic development has been critically appraised by economists and policy-makers. 1 Identifying sources of capital and regulating the rate of capital growth are essential tasks of economic planning in developing nations. Economic growth models, particularly two-sector models, have been developed to describe the process of economic transformation with domestic savings and investment as the key driving forces in achieving a successful growth path. The analytical abstractness of two-sector models, however, does not provide a very accurate portrayal of peasant economic behavior, particularly savings and investment decisions. This weakness has prompted several writers to call for a more comprehensive approach in analyzing the structure of and advocating policy for developing nations. 2