Evaluating the effectiveness of the Agribusiness Initiative Trust loan guarantee scheme in Mukono District, Uganda

Abstract

The purpose of the study was to establish the effectiveness of the ABI Loan Guarantee Scheme on production among small agribusiness enterprises, to establish the effectiveness of the ABI Loan Guarantee Scheme on employment creation among small agribusiness enterprises,and to assess the effectiveness of the ABI Loan Guarantee Scheme on income growth among small agribusiness enterprises in Mukono District.

The study employed the evaluative cross-sectional survey design and also a quantitative approach was used. The study also used a self-administered questionnaire and the findings revealed that the effectiveness of ABI Loan Guarantee Scheme on Production among agribusiness in Mukono District were very high. The findings also revealed that ABI loans enable small agribusiness enterprises to increase production output which facilitates constant and timely supply of goods on the market, thus led to growth of agri-business sector in the district. The findings further reveal the effectiveness of ABI Loan Guarantee Scheme on employment creation among agribusiness in Mukono District was high. The findings also revealed that effectiveness of ABI Loan Guarantee Scheme on income growth among agribusiness in Mukono District was very high as many respondents agreed that loan accessed from ABI enable them to invest and induce their incomes. The study concluded that ABI Loan Guarantee scheme are easy to access which avails avenue for employment creation. The study recommends that ABI loan Scheme should continue to reduce the interests charged on loans in order to reduce on the cost of capital in the agribusiness to facilitate production which lead to income growth and creation of employment opportunities. ABI loan Guarantee scheme should continue to offer advisory loan access and use services to agribusiness enterprises to enable them meet their business priorities in time.