Factors affecting credit accessibility in Uganda : A case study of Barclays Bank, Uganda

Abstract

The topic under study was “factors affecting credit accessibility in Uganda;” a case study of Barclays Bank, Uganda. Data was collected using questionnaires, the main tool of data collection. The data collected was edited, coded and entered in SPSS version 16.0 for analysis. A sample size of 72 clients was selected using simple random sampling. Majority of the respondents that were interviewed were females (76.39%) and the males were (23.61%) in the age group of 24 to 29 years. (72.22%) who were also the majority of the respondents attained secondary as their highest level of education and 54.17% of the respondents carried out trading as their major source of income who were also the majority. Chi-square, a non parametric test was used to test how different factors affect credit accessibility in Uganda. Hypotheses were tested at 95% significance level. Results from the study showed that chi-square values 0.327 for interest rate, 0.018 for banks’ willingness to extend credit to clients and 0.168 for strategies to scale up clients’ access to credit, were the highest chi-square values and therefore represented the highest significance level effect on credit accessibility while chi-square values 0.013 for terms of credit and 0.01 for collateral security represented the lowest chi-square values and therefore lowest significant level effect on credit accessibility in Uganda. Basing on the findings of the study,commercial banks should charge affordable, flexible and realistic terms of credit and collateral security rates to their clients. And since it is a primary preoccupation of commercial banks to offer credit to as many customers as possible, this will improve their capacity, performance and efforts. Basing on the findings still the government should intervene to improve performance of commercial banks and other credit reference bodies by putting in place policies and strategies to scale up clients’ access to credit and reduction interest rates on credit.