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

percentage of brokers, about 84 percent, established or set up their own business, whereas 12
percent inherited the business from their parents or relatives (Table 2.2).
Table 2.1: Year of establishment
Year Number of brokers %
Before 1974 5 7.5
1975–90 9 13.4
Since 1991 53 79.1
Total 67 100.00
Source: Survey, 2002.
Table 2.2: Means used to start the business and source of
initial capital
Description Number %
Means to start business
Set it up/established it
56 83.6
myself
Inherited 8 11.9
Bought 3 4.5
Total 67 100.0
Source of initial capital
Own or self 39 58.2
Gift from family 1 1.5
Bank loan 1 1.5
Borrowed from relatives and 7 10.4
friends
Other 19 28.4
Source: Survey, 2002.
The average capital required to start the business was about birr 12,873, and the main source
of initial capital was own funds, followed by borrowing from relatives or friends. Formal
financial institutions supplied start-up capital for only 1.5 percent of the cases (Table 2.2).
Many of the sample brokers (58 percent) performed their activity on premises rented from the
government, while the rest (40 percent) rented from individuals who had rented from the
government (Table 2.3). The premises are used to keep unsold stock and to undertake
wholesale and retail activities after 9:00 a.m. The average size of stalls is very small—only
34 square meters—and costs an average of birr 437.80 a month. One of the brokers has no
stall, implying that brokerage may not necessarily require a stall unless a broker has an
interest in retailing or wholesaling activities.
In addition to brokerage, the sample brokers perform grain retailing, wholesaling, milling,
and the like. Grain retailing and wholesaling are performed by 21 percent and 96 percent of