Financial Literacy, Digital Financing, And Access to Financing by Small Scale Farmers in Apac District.
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Date
2025-12-05
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Makerere University Business School
Abstract
Access to formal financial services remains a critical challenge for smallholder farmers in Uganda, limiting their ability to invest in farm inputs, manage risks, and improve productivity. This study investigated the determinants of Access to Finance among smallholder farmers, with a focus on Digital Financing and Financial Literacy, and examined their interrelationships and influence on financial inclusion. A cross-sectional survey design was employed, collecting quantitative data from 153 farmers using structured questionnaires. Descriptive statistics, correlation analysis, and multiple regression were used to analyze the data. The findings revealed that formal access to financial services is generally limited, with only 28.76% of farmers holding bank accounts and 26.14% having accessed credit from formal institutions. Mobile money accounts were widely adopted (87.58%), but use of digital financial services for agricultural payments, input purchases, and savings was moderate. Financial literacy among farmers was moderate, with strengths in budgeting and saving, but low awareness of agricultural insurance and risk mitigation strategies. Correlation analysis showed strong positive relationships between Access to Finance, Digital Financing, and Financial Literacy (ranging from 0.772 to 0.798, p < 0.01). Multiple regression analysis indicated that Digital Financing (B = 0.391, p < 0.001) and Financial Literacy (B = 0.478, p < 0.001) are significant positive predictors of Access to Finance, with Financial Literacy exerting the strongest influence. The study concludes that improving financial literacy and promoting digital financial tools are critical to enhancing farmers’ access to formal financial services. Integrated interventions that combine financial education, digital financial inclusion, and affordable credit products are likely to increase investment in agriculture, improve risk management, and enhance productivity and income. The study recommends targeted training programs, gender-sensitive digital financial inclusion initiatives, and development of tailored agricultural financial products to strengthen financial resilience among smallholder farmers.
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This is a master's thesis.
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Citation
Okwir, C. (2025). Financial Literacy, Digital Financing, And Access to Financing by Small Scale Farmers in Apac District. (Unpublished master's dissertation). Makerere University Business School, Kampala, Uganda.