Repayment Performance of Smallholder Farmer Revolving State-credit in Luwero District, Uganda

Steven Yiga^1,

¹Department of Agribusiness and Natural Resource Economics, Makerere University, Uganda

Cite this paper:
Steven Yiga. Repayment Performance of Smallholder Farmer Revolving State-credit in Luwero District, Uganda. Journal of Applied Agricultural Economics and Policy Analysis. 2018; 1(1):15-21. doi: 10.12691/jaaepa-1-1-3

Abstract

Many state-sponsored agricultural credit schemes in developing countries such as Uganda collapse due to high default incidences. Using Tobit regression and descriptive statistic analysis, this study inquired into repayment performance of one state-provided credit – the Integrated Support to Farmer Groups (ISFG). Structured questionnaires were developed, pre-tested and then used to collect data from 153 beneficiaries. Respondents were sampled by purposive and then multi-stage random technique. The respondents were; male dominated, aged 45 years and with formal education level of seven years. Repayment of the ISFG significantly depended on; the distance of the beneficiary from the sub-county, the period taken by the farmed enterprises to mature, beneficiary education level and credit use experience, amount to be repaid and returns to the credit. The paper recommends promotion of short-period maturing enterprises under the ISFG, integration of adult education in the scheme and selection of beneficiaries farther away from the sub-county if the likelihood of repayment of the ISFG is to be enhanced.

Keywords:
ISFG credit repayment tobit model

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