Credit Management and the Performance of Agriculture Loans in Uganda: A case of Hofokam Limited
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Date
2013-02
Authors
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Journal ISSN
Volume Title
Publisher
Uganda Management Institute
Abstract
Despite several efforts by government, the private sector and Non Governmental Organisations
(NGOs) to support agriculture through agricultural loans, the performance of agricultural loans to
develop agriculture in Uganda is still below average. The study sought to examine the effect credit
management have on the performance of agriculture loan as a product in HOFOKAM Limited.
The study adopted a case study correlational survey design with a population of 99 respondents
from which purposive sampling and simple random sampling methods were used to select the
respondents. Data were collected from both the staff and clients of HOFOKAM using self
administered questionnaires and interview guide. The findings indicated that there were positive
significant relationships between credit risk assessment, credit monitoring, credit control and the
performance of agricultural loans which was confirmation that credit management was a major
determinant of agricultural loans performance at HOFOKAM. From the regression results, credit
risk assessment, credit monitoring and credit control were strong predictors of agricultural loans
performance. This is implication that improvement in credit risk assessment, credit monitoring and
credit control would enhance the performance of agricultural loans at HOFOKAM. The study
recommends therefore, that management at HOFOKAM offer specialized training to staff and
clients in the area of credit management and also create awareness about the existing national
polices and regulations to staff and clients. Management could consider putting in place a fully
fledged customized credit management system to coordinate the risk assessment, monitoring and
control functions. To study the true nature and quality of credit risk assessment, credit monitoring,
credit control and the performance of agricultural loans, a longitudinal study is more appropriate.
Since the model could only explain 30.6% in variance of the performance of agricultural loans, the
study recommends that another study be carried out comprising of other variables which were not
part of the model.
Description
Keywords
Credit Management, Performance, Agriculture Loans, Uganda
Citation
Kaahwa, Charles Isingoma (2013) Credit Management and the Performance of Agriculture Loans in Uganda: A case of Hofokam Limited