Assessing gender disparities in access to agricultural loans in Wakiso sub-county, Wakiso district.

Abstract

Access to financial services is crucial for promoting productivity and rural development among farmers in Uganda. Female farmers face significant hurdles in accessing agricultural loans, resulting in gender disparities in financial inclusion. This study focused on assessing the gender disparities in access to agricultural loans among farmers in Wakiso sub-county, Wakiso district. A cross-sectional research design was used to collect both qualitative and quantitative data from 100 randomly selected farmers (45 male, 55 female). Descriptive statistics were generated from the cleaned data, coded and entered into Microsoft Excel 16, and analyzed using SPSS version 20. Results of the study show that more female farmers (81.8%) applied for agricultural loans than the males (53.3%). However, the male farmers had higher success rates (70.8%) compared to the females (53.3%). Besides, the average loan amounts approved for the male farmers (UGX 5,905,882) was higher than for the females (UGX 5,008,333). Similarly, there was a high discrepancy in the interest rates approved for male and female farmers (15.85% and 12.95%, respectively). The perceived gender inequality index (GII) for the approved loan amounts for male and female farmers was moderately higher (0.54) compared to the GII for the interest rates (0.17). The loan repayment period was not significantly different for male (8.06 months) and female farmers (9.73 months). The main sources of credit accessed by both male and female farmers were the banks (48.5%), VSLAs (22.7%), and cooperatives (14.7%). More female farmers accessed loans in the banks, VSLAs, and cooperatives than the males. Females participated more in VSLAs than the males. The males got more loans from friends than females. The majority of the successful borrowers invested more of the loans into the livestock enterprises (poultry 34%, piggery 19%, diary 13%, goats 4%) than in the crop production (vegetable 12%, banana 9%, maize 8%, coffee 5%). The major factors responsible for the high gender disparities in access to agricultural loans among male and female farmers include lack of collateral security among women (27.5%), biased loan approval processes (22.5%), lack of financial literacy among women (20.9%), societal norms and gender roles (15.0%), and limited outreach for financial services among farmers (14.2%). To remedy these challenges, most lenders are focusing on offering financial literacy to female borrowers, designing special credit packages for women and giving out group loans to female borrowers to enhance the ability of female farmers to access and utilize agricultural loans. There is need to develop and roll out non-biased and gender-neutral lending policies for financial inclusion. Further research can target assessing gender disparities in access to loans at the level of lenders.