Lending methodologies and the performance of commercial farmers in rural areas:

Abstract

The study investigated the effect of lending methodologies on the performance of commercial farmers in rural areas with a case study of Pride microfinance Jinja The specific objectives were to find out the relationship between individual lending and performance of commercial farmers,. to examine the relationship between group lending and the performance of commercial farmers in rural areas; to establish the relationship between community based lending and the performance of commercial farmers in rural areas. The study adopted a case study design combining both qualitative and quantitative approaches to collect and analyze data This data was then entered and analyzed using SPSS software to generate descriptive and inferential statistics then these were further analyzed using correlation and a relationship was found between lending methodologies and performance of commercial farmers. From the correlation analysis that was conducted, it was discovered that individual lending had a positive and significant relationship with performance of commercial farmers. Also from the correlation analysis, it was discovered that group lending had a positive and significant relationship with performance of commercial farmers. And finally, a positive and significant relationship between community based lending and performance of commercial farmers. Therefore, the study concluded that there is a positive and significant relationship between different lending methods and performance of commercial farmers. The study recommended that the Microfinance institutions should develop good proper and effective credit management strategies that are needed to enhance the quality of institutional support for farmers growth in the area.There is need for Microfinance institutions to support and strengthen the growth of farmers by providing good loans services and provide good linkages between the service deliveries of micro-finance.