Effects of Credit Facilities On Agricultural Production of Small Scale Farmers. (A Case Study in Molo Sub County-Tororo District)

ABSTRACT

The main objective of the study was to assess relationship between credit facilities and agricultural production of small-scale fanners in Mob Sub county, Tororo District. In order to achieve the purpose of this study, three specific research objectives were addressed: to determine the demographic characteristics that influences the accessibility of credit by small scale farmers in Mob Sub County, Tororo District, to determine the impact of credit facilities on small scale farming in Mob Sub County and to establish the relationship between credit facilities and agricultural production of small-scale farmers in Mob Sub County, Tororo District. This study utilized a descriptive survey based on a sample drawn from 4 Parishes which formed the locations of small scale farmers of Mob Sub County. The conceptual framework of the study was based on conceptual relationship between independent and dependent variables. Probability sampling was chosen among the many sampling designs available, multi stage, cluster, stratified and simple random sampling were adopted to get 76 respondents for the study. Data was collected by use of structured questionnaires, interview. The study established the demographic characteristics comparison based on credit status of small scale fanners indicates that borrowers have significantly higher values than non-borrowers, especially in area cultivated, input usage and productivity. A similar trend was observed when farmers with farm size equal to or greater than two hectares were compared with those with less than two hectarcs. Provision of credit to small-scale farmers makes them more productive. The finding show that credit facilities accessibility is among the main related factors that predict agricultural production of small-scale farmers in Mob sub County. This study strengthens the hwothesis that there is a direct relationship between credit and productivity. The findings of this study will help identify the major problems facing small scale farmers in Uganda and recommend solutions to these problems. This research will provide insightful reference that agriculture policy makers and researchers and scholars in Uganda can rely on in regard to challenges facing small scale fanners and may also reveal other areas that might require farther research.