Assessment of the use of credit on tomato production enterprises in Nsangi Sub county, Wakiso District

Abstract

Tomato production is an important enterprise in improving socio-economic livelihoods, however there is little information on the tomato enterprise In Nsangi sub county, Wakiso district. The use of credit has been envisaged in the reduction and alleviation of poverty. credit repayment is also paramount .it is important to have viable financial institutions in central Uganda, Nsangi sub county, Wakiso district, by using figure 2 that showed money lenders, micro finance, SACCOS as the main sources of finances . the regression model of SPSS was used to show loan repayment performance with variables such as farmers profit margin, experience of the farmer, sex all measured loan repayment performance and bar graph was used in figure 3 to show the major challenges tomato farmers meet in accessing credit such as lack of collateral, high interest rate, too much bureaucracy all being involved. A pre-test structured questionnaire was administered to the farmers and to collect data concerning factors that affect loan repayment performance, the main sources of finance and major challenges faced by tomato production enterprises of Nsangi Sub County, Wakiso district. At least 60 tomato farmers were interviewed in Nsangi Sub County. The study found that, majority of tomato farmers were female(68.5%), majority of farmers attended secondary education( 65%), 55% of tomato farmers were married. The study found out that majority of farmers take one month to get credit and 75% of farmers take one month to pay back the credit. The major source of income was SACCOS (60%), the interest rate paid by the farmers is at 20.6%, 93.3 % faced the challenge of high interest rate. The study indicates that farmers experience was the main determinant in loan repayment performance. Credit use in tomato production has ability to increase farmer’s income as well as productivity when there is reduction in interest rate by available sources of finance in Nsangi Sub County, Wakiso district.