Factors influencing the access to credit in Uganda

Abstract

This study was aimed at examining and understanding the factors that affect the access to credit facilities in Uganda. The study used data from the 2018 Finscope Uganda survey and the survey was nationally representative with 3200 households selected using a three-stage stratified sampling approach. The explanatory variables were; the age of the respondent, gender of the respondent, residence of the respondent, one’s marital status, the education level, collateral ownership and house hold headship. and the dependent variable was access to credit to credit facilities. Approximately, 56.5 percent of the respondents reported having accessed credit facilities in the past 12 months. Age of the respondent, marital status, gender, one’s education level, place of residence, and collateral ownership significantly predicted credit access at bivariate analysis. Multivariate analysis results showed that the unmarried, being female, attainment of education, urban residence, and collateral ownership significantly predicted credit access better. Interventions to improve credit access include supporting business skills and capability trainings for women, building business case for equal opportunities for both men and women, government should support MFIs and also develop partnerships with financial institutions, financial literacy should as well be enhanced. Target groups focused on by the financial institutions should include; women, the unmarried, rural residents, those with no collateral ownership and the younger population at any level of education as part of the target clientele group.