The effect of short term agricultural loans from SACCOs on agricultural production in Uganda: a case study of Luwero district
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Lack of capital has been identified as one of the constraints faced by small scale farmers in Uganda. The aim of this research work therefore, was to examine the effect of short-term agricultural loans from SACCOs on agricultural production in Uganda with specific objectives to; i) To assess how levels of education affect access to loans for agricultural use, ii) To determine the extent to which short-term agricultural loans affect the level of output of small-scale farmers, iii) To establish how size of land is associated with access to agricultural loans. The methodology entailed adoption of a mixed methods research approach. The sample targeted by the survey consisted of 61 farmers, who had been selected using the Cochran’s formula of sample size determination, and the data obtained were summarized into percentages. The data collection tool employed by the study was a structured questionnaire. The questionnaire response rate realized was 100%, implying a zero non-response bias. 61 questionnaires were duly completed and returned for analysis. The Study used the Multivariate Regression Analysis to assess the extent to which short-term agricultural loans affect the level of output of small-scale farmers. The key independent variables used were; loan amount, farm size, household size, farm size and level of output as the dependent variable. Results revealed that the males were significantly (p=0.021) associated with increase in the level of output compared to the females, farmers who were older i.e. in the age groups 20-29 and 30-39 were significantly (p=0.038 & p=0.16 respectively) associated with increase in the level of output compared to other age groups. Furthermore, farmers who had higher loan amount (1,000,000 and above) were significantly more productive than those will a lower amount. In order to make the short-term loans more successful in increasing agricultural productivity, the researcher recommends implementers to focus on encouraging young farmers to work with the older ones since the latter were found to be experienced and they were associated with increased productivity. These findings will also help address apparent gaps between policy and implementation.