Prof. Jude T. Lubega | ICT & Management Consultant, Professor, Practitioner and Rotarian​

The Financial Performance dilemma in Agricultural Cooperatives of Kamwenge and Sheema districts in Uganda. The Credit Facilitation Decisions perspective

The Authors:

Faith Ahabyoona, Jude T. Lubega, Martha Kibukamusoke

Publication Type: Journal Paper   |    No. of Views: 282 views

Year of Publication: 2020

Abstract

This paper argues that forming agricultural cooperatives was to mitigate agricultural financing deficiencies experienced by smallholder farmers. These cooperatives however are experiencing financial performance challenges; decline inaccessible credit compared to farmer’s credit demand and increased loan non- repayments. The paper examined this dilemma from a credit facilitation decision perspective. A cross-sectional research design along with a mixed-methods approach for data collection was utilized. The sample size was 113 credit facilitation decision-makers from six agricultural cooperatives in Kamwenge and Sheema districts in Uganda, with an 88.5% response rate. The bivariate findings reflected a positive significant relationship between credit facilitation decisions and financial performance. A breakdown of which reflected: A positive significant relationship between credit capital sourcing decisions and financial performance with r of 0.300** Sig (=0.002). A positive significant relationship between credit terms and screening decisions and financial performance with r of 0.504** Sig (=0.000). A positive significant relationship between credit terms and screening decisions and financial performance with r of 0.309** Sig (=0. 0.002). The multi-variate findings reflected r2 of 21.8%. To mitigate the financial performance dilemma, agricultural cooperatives need to adopt optimal techniques of making credit facilitation decisions with an emphasis on setting credit terms and screening decisions