Credit Risk Management and Agricultural Financing By Banks in Uganda Case Study: Entrepreneurs Financial Centre (Efc), Acacia Avenue Kololo Branch.

Abstract

The purpose of this study is to establish the relationship between credit risk management and agricultural financing which were my variables, independent and dependent respectively. The specific objectives of the study were, to examine the relationship between credit appraisal and agricultural financing, to investigate the relationship between credit management and agricultural financing, to access the relationship between credit insurance and agricultural financing. The objectives where set to explain the research questions. A case study design was used in this study as the design, quantitative approach was used as the study approach and a cross sectional design was used for the time dimension. The sample size for the study was 32 respondents and questionnaires were used to collect data. The research findings, established that there is a significant positive relationship between credit appraisal and agricultural financing, a significant positive relationship between credit management and agricultural financing and a significant positive relationship between credit insurance and agricultural financing. The study concludes that credit risk management explains financing in the agricultural sector. The study therefore, recommends that financial institutions should set credible credit policies to manage risks in agricultural financing and to ensure that the policies and guidelines are followed for every loan given out. Banks should also encourage the loan applicants to attain credit insurance so that they don’t bare the risk of default on loan payment.

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