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CREDIT DEMAND AND CREDIT RATIONING IN THE INFORMAL FINANCIAL SECTOR IN UGANDA 1
Author(s) -
OKURUT F.N.,
SCHOOMBEE A.,
BERG S.
Publication year - 2005
Publication title -
south african journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.502
H-Index - 31
eISSN - 1813-6982
pISSN - 0038-2280
DOI - 10.1111/j.1813-6982.2005.00033.x
Subject(s) - credit rationing , rationing , asset (computer security) , welfare , order (exchange) , economics , dependency ratio , business , labour economics , finance , financial system , economic growth , market economy , interest rate , population , health care , demography , computer security , sociology , computer science
This paper investigates the household and individual characteristics that influence the demand and supply of informal credit in Uganda, which credit is important for improving the welfare of the poor. Informal credit demand is positively and significantly influenced by age, sex, education level, dependency ratio, household expenditure, and regional location. On the supply side, informal lenders' credit rationing behaviour is negatively and significantly influenced by age, sex, asset values, and regional location. Government policies should focus on increasing both the productive capacity and wealth of households in order to enhance the poor's creditworthiness and make them less susceptible to credit rationing by lenders.