Challenges Inhibiting the Transformation of Subsistence Farming into Thriving Agri-business in Rural Uganda

Abstract

This study investigates the challenges involved in the development of agri-businesses in rural Uganda, from largely subsistence or micro-enterprise production to self-sustaining viable and thriving economic entities. The aim of the study was to find out why there is a difficult transition from subsistence farming to a properly functioning agri-business in rural communities even when funding is available. The research applied a qualitative case study approach. The study found out that despite rural finance services accessibility, several other challenges hindered rural business growth and development. Such identified challenges include high cost of borrowing, lack of entrepreneurship skills, inadequate infrastructure, insufficient markets, adverse climate changes and socio-cultural constraints. It was found that the simple availability of micro-finance is not enough to ensure that rural agribusinesses prosper. Even when small businesses access such finance, other critical factors such as technology as well as physical infrastructure provision could still hinder the success of such business. Equally important is the socio-cultural environment of the business which could also hamper success even when finance is accessible.

Keywords: Agri-businesses, Rural Areas, Micro-finance Institutions, Micro-enterprise, Uganda