The role of agricultural finance on the improvement of household incomes: case study of Nkozi sub county Mpigi district

Abstract

The study set out to examine the role of agricultural finance and the improvement of household incomes in Nkozi, Sub County. The study had three objectives, namely: to find out how loans in agricultural finance lead to the improvement of household incomes in Nkozi, Mpigi district, to establish the role of agricultural financing on the improvement of household incomes and to establish the relationship between agricultural financing and improvement of household incomes The study was carried out using a case study research design where both qualitative and quantitative research approaches were also used, data was collected using a questionnaire and during the data collection, stratified and purposive sampling techniques were used as the sample size of 80 respondents was used in the study. From the study findings, it can therefore be concluded that for the people of Nkozi Sub County to benefit from the loans acquired from the SACCO, they need to first understand the roles loans play in agricultural finance in improving of household incomes. More so, the people need to understand the different challenges like lack of enough collateral to acquire loans and high interest rates on loans acquired in order to be able to establish possible ways of reducing such challenges like negotiating with the SACCO and the central bank to reduce on interest rates as this will enable them to be able to acquire agricultural loans with ease and in the long run be able to improve their household incomes. The study recommended that the leaders in Nkozi Sub County should invest in sensitization campaigns to train and encourage people on proper use of loans acquired in agricultural production by carrying out workshops and seminars. There is need for government through the central bank to intervene through providing support and reducing on interest rates levied on loans. There is also need to set up credible and reliable mechanisms to monitor agricultural loans acquired so as to ascertain whether the loans taken are being used by farmers for the purpose they were intended to