Paper Title
Study on Access to Formal Financial Credit Services By Smallholder Rural Farmers for Agricultural Investment: Astrugling Option to Rural Development in Uganda

Abstract
TheMaputo declaration on Agriculture and Food Security in Africa committed Governments to the allocation of at least 10 percent of national budgetary resources to agriculture and rural development. The recent years have witnessed a renewed interest in agricultural investment in Uganda. In many cases, this new momentum has translated into large-scale farm production in the rural areas of Uganda. However, less attention has been accorded to the most contributors of rural development that do not require massive technological developments. These include arrangements between financial institutions and the smallholder farmers who view credit as an important means to generate income.This study looked at access to formal credit for agricultural investment by the smallholder farmers in Uganda as an alternative to rural development. The specific objectives were to: explore the perceptions and preferences of smallholder rural farmers towards access to formal credit facilities, determine the extent to which rural farmersí need for agricultural investment influences access to credit that eventually transforms their livelihoods and determine the factors influencing smallholder rural farmerís access to formal credit services.The study unveiled that the proportion of people in Uganda who largely apply for loans is slightly higher among urban residents compared to their rural counterparts. In addition, analysis of the source of loans reveals that most loans are acquired from informal sources.Long-term investment confirms that farmers have a strong resolve to sustain farming as a major income generating option.Final observations indicate that the smallholder farmersí actually invest in their agricultural activities when they access financial credit. The uptake of loans has been slow and has resulted in questioning whether this addresses the needs of the rural poor. Pedestal on the above, it is expected that when the challenges faced by the smallholder farmers in accessing formal credit are cleared out and of course conditions improved, their incomes will improve upon investing in agriculture. Keywords- Access,Financial credit, Smallholder, Agricultural,Rural Development.