Financial Inclusion: Is it a Precursor to Agricultural Commercialization amongst Smallholder Farmers in Uganda? A comparative Analysis between Lango and Buganda Sub-regions
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Date
2020-11-17
Journal Title
Journal ISSN
Volume Title
Publisher
Journal of Economics and International Finance
Abstract
This study examines the contributions of financial inclusion in supporting agricultural commercialization amongst smallholder farmers in Uganda in Lango and Buganda sub-regions. The researcher adopted a comparative study and cross-sectional survey design where descriptive, bivariate and multivariate data analysis was used. Chi square procedure was run to test the hypothesis that financial inclusion does not affect agricultural commercialization amongst smallholder farmers in Lango and Buganda sub-regions. Regression analysis was specifically used to predict the level of change in agricultural commercialization due to changes in financial inclusion. The study identified financial inclusion as one variable that can predict the success of agricultural commercialization, though it varies from one region to another. In Lango, efforts by government to increase financial access is a positive factor to agricultural commercialization while in Buganda, it is a negative factor. In Lango, land is communal and not individually owned. Therefore, smallholder farmers need to access finances to purchase land for commercial farming. In Buganda, however, land is freehold, which makes smallholder farmers to own chunks of land from their parents. The study has established some common factors that limit agricultural commercialization in both Lango and Buganda, that is, expensive equipment and fluctuating prices while poor infrastructure is no longer a big worry. This paper recommends that, financial service providers should revise their lending terms downwards to reach smallholder farmers, some of whom lack collateral security to pledge for credit. While the government takes credit for improving infrastructure, government, through her policy organs like ministry of agriculture, should provide buffer prices against price fluctuations.
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Keywords
Agricultural Commercialization
Citation
Eton, M., Mwosi, F., Ejang, M., & Poro, S. G. (2020). Financial inclusion: Is it a precursor to agricultural commercialization amongst smallholder farmers in Uganda? A comparative analysis between Lango and Buganda sub-regions.