The Future of Smallholder Farming in Eastern Africa - Uganda ...

questionnaire (Figure 8). Prominent among these was fear of the land being auctioned if
title deed was used as collateral.
Figure 8: Reasons for not applying for the loan
Other available
sources
19/ 6.1%
9.4%
No need
22 / 7.1%
Lack awareness
91/29.4%
Do not meet
requirements
103/33.2%
Other specified
46/14.8%
The survey revealed that no household used the title deed as collateral. The main
collateral was group guarantee and co-signature that accounted for 80 percent of
collaterals used. Indeed the relationship between title deed and access to credit had a
Correlation Coefficient of 0.0626, which was not significant even at 10 percent level.
(Annex 1). This in effect, downplays the importance of title deed in securing of credit
facilities and shows the importance of group lending systems.
The study showed that only 2.3 percent of women land users applied for and received
credit facilities as compared to 12 percent or their male counterparts (Table 4). This was
attributed to lack of awareness and failure to meet the requirements such as collateral and
other forms of security required by the financial institutions.
Table 4: Gender Access to Credit Facilities
Count (%)
Sex of land user
Applied/received loan Female Male
Yes 2 (2.3%) 17 (12%)
No 84 (97.7%) 125 (88%)
86 (100%) 142 (100%)
Chi-square 42.12, significance level of 0.00000
Access to credit was relatively lower in Suba where only 2.7 percent of the respondents
acquired loans compared to 9.4 percent in Laikipia. In both districts, most of those who
acquired loans never used them for agricultural developments but for educating children
and other non-farm activities. Out of the 19 farmers who received credit facilities, 47
percent used the funds on education of children, 16 percent for non-farm business and 37
percent for purchase of farm inputs.