Institutional factors and access to agricultural loans in Stanbic Bank.

Abstract

The study was to find out the relationship between Institutional factors and access to Agricultural loans in Stanbic Bank a case study of Mawokota County, Mpigi District local Government. The study was underpinned by John Maynard theory of banking (1976). The objectives were; to find out the relationship between interest rates and access to agricultural loans in Stanbic bank, to determine the relationship between the size of the institution and access to agricultural loans in Stanbic bank and to establish the relationship between credit risk and access to agricultural loans in Stanbic bank. The study population was 110 where a sample size of 70 was selected for the study. Out of these 70 respondents, 61 responded (87.1%). Data was collected using the questionnaire, interview guide and documentary review. The findings revealed that there was a weak relationship between interest rates and access to agricultural loans, there was a significant positive relationship between size of the institutional and access to agricultural loans and a significant negative relationship between credit risk and access to agricultural loans in Mawokota County, Mpigi District local Government. The study recommends that Stanbic bank should increase its branch offices to other rural areas like Malima sub County, it should also increase on its loan officers who should cooperate with the agricultural leaders to increase farmers’ awareness and their trust. Stanbic bank should also offer loans of low interest rates with no other costs to the agriculturalists; it should encourage farmers to form cooperative groups to solve the problem of lack of collateral and loan default, contractual arrangements should be made to reduce the price risk.