Analysis of the factors influencing credit uptake among people from banks and other financial institutions in Uganda: evidence from UNHS data 2019/20
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This study was conducted in Uganda. The objective of the study was to find out the factors influencing credit uptake among people from the banks and other financial institutions in Uganda. The study used secondary data of UNHS of 2019/20 by UBOS. The researcher used STATA version 16 software to analyse collected data at both univariate, bivariate and multivariate levels. At bivariate level, the research findings indicated that the gender of the household head had a significant influence on credit uptake (p-value (0.000) less than 0.05). It also indicated that age of an individual significantly influences credit uptake from financial and non-financial institutions since the P-Value (0.000) was less than the critical value (0.05). The study findings also indicated that availability of collateral security influences credit uptake (p-value (0.000) less than 0.05). The study results also indicated that there was a significant relationship between education level of household heads and credit uptake (p-value (0.000) less than 0.05). Results from the study also indicated that marital status of a household head had a significant influence on credit uptake (p-value (0.000) less than 0.05). Findings also indicated that interest rate had a significant influence on credit uptake (p-value less than 0.05). Other factors that influenced credit uptake included poverty status, occupation of household head and loan purpose. At multivariate level, the researcher used multinomial regression and the results provided that age, gender, education level, collateral security and household size had a positive significant influence on credit uptake and interest rate charged had a negative influence on credit uptake. Also, at multivariate level, the study indicated that marital status of a person, occupation of a person, poverty status and loan purpose do not have a significant relationship with credit uptake (p-values > 0.05). The study recommended that proper sensitization of credit uptake and its advantages should be promoted in Uganda in order to boost the economy and also, incentives should be put to encourage women and less educated people to take up credit for example extending credit at low-interest rates.