Contribution of Social Capital and Microcredit Accessibility on Economic Welfare of Small-Scale Farmers in Mityana District, Uganda

This study investigates the contribution of social capital and microcredit accessibility to the economic welfare of small-scale farmers. Specifically, the study examines the relationship between social capital and economic welfare of small-scale farmers, the relationship between microcredit accessibility and economic welfare of small-scale farmers in Mityana District and seeks to determine the contribution of social capital and microcredit accessibility on the economic welfare of small-scale farmers in Mityana District. The study uses primary data sources collected from a total population of 384 individuals and uses SPSS to analyse the results using Pearson’s correlation as well as regression analysis. The results in this study reveal a positive, weak, significant relationship between social capital and economic welfare (r=.442, p=.000), moderate significant relationship between microcredit accessibility and economic welfare of small-scale farmers (r=0.497, p<0.01). The study reveals that social capital and microcredit accessibility explain 28.8% of the changes in the economic welfare of small-scale farmers in Mityana district, with microcredit having (β=0.364, p<0.05). and social capital having (β=0.242, p<0.05). This implies that the two variables are statistically significant in explaining changes in economic welfare. The researcher concludes that there is a significant though weak positive relationship between social capital and economic welfare of small-scale farmers, a significant moderate positive relationship between microcredit accessibility and economic welfare and a significant contribution of social capital and microcredit accessibility on the economic welfare of small-scale farmers. The researcher recommends that cooperation should be encouraged among small-scale farmers based on social norms, social networking and social trust to increase their accessibility to microcredit for better standards of living. Government fiscal policies, such as transfer payments intended to improve the economic welfare of small-scale farmers, should be tailored around social norms, social networking and social trust of small-scale farmers and ensure favourable credit terms with easy outreach to increase accessibility to microcredit.