Factors influencing access to agricultural credit in Uganda: a case study of Farmers in Mbale District

Abstract

The purpose of this study was to examine the factors and impact of limited access to agricultural credit and thereafter develop strategies that would contribute to increased access to credit by farmers in Mbale district, Uganda. The Specific objectives were: To identify the factors limiting access to agricultural credit in Mbale district, Uganda; To establish the effects of limited access to agricultural credit in Mbale district, Uganda; To establish strategies that can be adopted by different stakeholders to enhance timely access to agricultural credit in Mbale district, Uganda. A descriptive research design was adopted, utilizing close ended questionnaires administered to a study sample size of 94 farmers in Mbale district. The data was analyzed using SPSS to generate descriptive statistics. Results from the analysis indicated that Environmental factors particularly drought limited access to agricultural credit which contributed to limited access to agricultural markets. The study recommended, the government, banks as well as other lending institutions should establish policies and procedures geared towards catering for specific credit needs for farmers including: Customized loan products, Flexible repayment periods especially during drought periods, Decentralized financial systems including farmer’s cooperatives, farmers associations or other forms of group responsibility for the administration and supervision of credit programmes at the local level, Agent and Mobile banking and Working with banks to develop and diversify their portfolio on agricultural financing to create demand for the products and services.

Keywords: Access, Agricultural credit; Smallholder farmers; Agricultural markets