Determinants of credit access among farmers in Uganda

Abstract

The main objective of the study was to assess the determinants of credit access among farmers in Uganda. The study employed secondary data obtained from Uganda Bureau of Statistics, Annual Agriculture Survey, 2018/19. The analysis was done using STATA 15.0 for descriptive statistics, cross tabulation and binary logistic regression. The study findings showed that the sampled population was dominated by males (76.8%) and most of farmers had attained primary education (57.4%). Majority of the households were found to be from the western region of Uganda (32.9%). Most of the household heads were found to be 50 years and above (40.6%). The study also revealed that most of the household heads were found to belong to farmer groups (86.32%). The major purpose of the loans got by farmers was to pay for agricultural labor (94.9%). Most of the farmers were required to provide collateral security (93%). Furthermore, the study findings indicated that region, age of the household head, education level, household head belonging to a farmer group, purpose of the loan and household head needed to provide security significantly (P≤0.05) influenced credit access. Results from the logistic model showed farmers from Eastern region were 1.7068 times more likely to access credit as compared to those from Central. Educated farmers were more likely to access credit than uneducated farmers. Purchase of seeds, livestock and other purposes of the loan reduced a farmer’s access to credit as compared to paying agricultural labor. The study findings also revealed that membership to a farmer’s group was positively associated with credit access. The study recommended the government and non-governmental organizations should promote education, literacy among farmers as well as their organization in cooperatives and associations.