The Role of Microcredits in the Financing of Ugandan Agriculture

Vasa, László – Vida, Imre

Keywords: mikrocredit, agricultural finances, agricultural loan, OSINT, Uganda, D14, D53, G10, G51, Q14

Agricultural financing is an important part of a formal and informal financial system focusing on rural areas. The results of several studies demonstrate that access to rural financial services has a positive impact on agricultural productivity, food security and poverty reduction. In our study, we present the place and significance of microfinance for the smallest producers of Ugandan agriculture. To explore the topic in the Ugandan context, we used the OSINT (Open Source Intelligence) method, which is a new approach in social sciences, in order to get a realistic picture of the research subject, as traditional statistical databases in the region either do not exist or are unreliable. With the help of OSINT, however, it is possible to obtain information that complements or validate data extracted from a traditional source. It can be stated that microfinance has its place in agricultural financing in the African context. Moreover, according to current data, the cessation of microfinance lending to the smallest producers would not only reduce production volumes but also jeopardize their livelihoods, which is contrary to any poverty eradication intent. Therefore, the Ugandan government is not only permissive towards microfinance organizations, but explicitly supports them and seeks to provide an incentive operating environment.

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