Abstract:
The general objective of this study was to describe the nature ofcredit obtained by the farmers and labour of small-scale fanners in Bumbobi Sub County. The specific objectives were; to describe the nature of credit obtained by small scale farmers, to examine the utilization of loans among framers and to determine the influence of loans on agriculture development. The study employed a descriptive research design and employed both qualitative and quantitative methods of data collection. The sampling techniques used were simple random and purposive sampling technique. The study finding showed that there is a positive effect of credit on acquisition of land, that there was no relationship between credit and access to labour because majority of farmers use family labour. This implies that credit help farmers in acquiring of capital. The study concluded that farmers in Bubombi Sub County use credit obtained for hiring land for agricultural production. Hence having an effect of credit on acquisition of land, there is no relationship between credit and access to labour because majority of farmers use family labour. The study recommended that credit providers should focus on introducing attractive packages with lower interest rates, easy registration processes and flexible payment terms. This will encourage more farmers to access loans and enable them expand their production which will ultimately lead to improved standard of living of families and the nation as a whole, the government and other stakeholders should create other alternative credit packages for farmers so as to ensure families are food secure, become self-reliant and living standards of small holder farmers increases and training before and after the loans are disbursed is a major factor that impacts on the manner in which these loans are managed. The results even show that, those who receive some form of training usually use the loans for the intended purposes, compared to those who do not receive any form of training. It is therefore recommended that; efforts should be made to intensify these training programs so as to reduce mismanagement of scarce financial resources. These financial resources can then be used to improve the welfare of the family.
