Assessment of Agricultural Revolving Fund Performance in Rural Uganda (Published)
Access to agricultural credit in rural areas in developing countries is limited and it undermines growth of rural agriculture based economies. The study assessed an agricultural revolving fund performance in terms of access to inputs, repayment for inputs and access to cash loans from farmers’ groups in rural Uganda. Two hundred farmers were interviewed. A structured questionnaire was used to collect quantitative data which was analysed using bivariate and linear regression analyses. The cost of inputs (p = 0.0001, R2 = 0.437), grace period (p = 0.0001, p = 0.0001, R2 = 0.423) and repayment knowledge (p = 0.0001, R2 = 0.406) influenced access to inputs. Location (p = 0.0001, R2 = 0.209), grace period (p = 0.0001, R2 = 0.209) and farmer group experience in savings and credit (R2 = 0.187) influenced repayment for inputs. Interest rate (p = 0.0001, R2 = 0.503) and farmer group experience in saving and credit management (p = 0.0001, R2 = 0.395) influenced access to cash loans. Majority of farmers were likely to access inputs if their cost was lower, the grace period was sufficient and farmers were well sensitized. Repayment for inputs was more successful for longer grace periods, and where the group had savings and credit management experience. Access to cash loans was influenced by interest rate and farmers’ group experience in savings and credit management. Cost of inputs, grace period, knowledge about the revolving fund, interest rate and farmers’ group experience of saving and credit management influenced the performance of the revolving fund significantly. Agricultural inputs given to farmers should be customized to their income levels to improve repayment, the grace period should be at least one year, highest interest rate should be 10% or lower. Beneficiary farmers’ groups should have five years’ experience in savings and credit management.
Keywords: Access, Credit, Farmer Group, Inputs, Repayment