Collaborative Efforts by a University, Government and Agricultural Cooperatives (ACS) to Develop a Credit Facilitation Tool:

Abstract

Financial performance of Agricultural Cooperatives in Uganda has constrained their ability to attract financiers and thus can’t extend timely and optimal credit facilities to Small Scale Farmers in Uganda despite their huge contribution to the country’ GDP. This situation is attributed to constrained decision making mechanisms in Agricultural Cooperatives s’ credit facilitation process. This article addresses how the University collaborated with the Government and the Agricultural Cooperatives to develop a credit facilitation tool to mitigate credit facilitation decision challenges. With a collaborative perspective, the study worked with 116 agricultural cooperatives decision makers in 6 agricultural cooperatives in Kamwenge and Sheema districts in Uganda. The study confirmed that for the financial years 2018 to 2020, Agricultural Cooperatives were not able to return on assets and on equity. Equally confirmed was that the Agricultural Cooperatives’ credit facilitation decision processes, undermined the involvement of technical officers, lacked structured means of recording credit data which delayed decisions on setting optimal lending rate, lending duration and lending limit. Confirmed too was limited credit tracking which was a hindrance to timely reporting. As a result, these confirmed credit facilitation decision challenges were utilized to develop a collaborative credit facilitation decision tool. Its design is presented using user case scenarios showing how the challenges were solved and an output of these scenarios was a six suited model called the Decision Enhancement Credit Facilitation Approach (DECFA). This tool once implemented by Agricultural Cooperatives will enhance the credit process thus quickening decision making in sourcing and availing credit to Small Scale Farmers. All this new knowledge created was done in the confines of a collaboration between the University, Government and the Agricultural Cooperatives.