Access and Use of Credit in Uganda: Unlocking the Dilemma of Financing Small Holder Farmers
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Date
2012
Journal Title
Journal ISSN
Volume Title
Publisher
Economic Policy Research Centre (EPRC)
Abstract
This policy brief is about access and use of credit in Uganda by small holder farmers. The brief uses the secondary data to
shed light on the extent of the problem and further uses successful case studies in agricultural financing to demonstrate how
improvements can be achieved. The major problem established from available information is that despite several agricultural
financing initiatives and other reforms in the financial sector in the last 20 years, access to credit by small holder farmers in
Uganda has remained very low in the region of about 10 percent. Examining the several agricultural financing initiatives since
1990s tends to suggest that the problem could largely be attributed to weak institutional framework and policy inconsistency on
agricultural financing over the years, notwithstanding household demand factors. The key policy recommendation drawn from
this assessment is that if agricultural financing is to improve, there is need to have strong institutional framework that focuses
on financing frameworks, monitoring and implementation. A better option is for government to support the establishment of a
rural or agricultural development bank that prioritises agricultural financing.