Financing strategies and performance of small and medium agribusiness enterprises in Uganda; A case study of farmer communities in Kitimbwa Sub County, Kayunga District.

Abstract

The main purpose of this study was to investigatethe relationship between financing strategies and performance of Agribusiness firms with two specific objectives where one was to assess the relationship between financial products availed by the financial institutions and performance agribusiness firms in Kitimbwa sub county and the other was to examine the relationship between lending policies by financial institutions’ and performance of agribusiness firms in Kitimbwa sub county. The research design was case study approach and the study approach wasthe multi method research approach.The sample size was 115,960, data was collected by use of questionnaires. Analysis was done by use of SPSSversion 16 and data was presented in tables. Whereas qualitative data was not collected. The findings showed that the respondents utilized the financial products such as the agricultural loan, the group loan and leases.Similarly, in second objectives, the findings show that in relation to Lending Policies and performance of Agribusiness firms. The majority of the respondents involved in the study were not required to provide collateral to access Agricultural financing, majority of the respondents believed thatthe interest rates attached to the loans is not manageable to them and that those who accessed the financing majority do not believe itenabled their businesses to growthus a barrier. Majority of the respondents involved in the study do not believe that the lending policies were flexible and favorable for them. In conclusion, there is a relationship between financing strategies and performance of agribusiness firms however there are several other factors that work collaboratively. The study recommends thatfavorable lending polices be put in place, farmers be empowered with information about the financial products available andhow to effectively manage financing.