A case study : exploring the influence of the informal financial sector on food security among smallholder farmers in Uganda, Greater Luweero

Abstract

Food insecurity is a global challenge especially to smallholder farmers. Yet, besides operating in the informal economy, many have limited access to finance. This qualitative study, therefore, will explore the influence of the informal financial sector (IFS) on food security among smallholder farmers in Uganda. The sustainable livelihood approach and food sovereignty were relied on as theoretical frameworks. Nineteen participants were interviewed, and four focus group discussions were held in 2019. An analytical framework was developed from the field study to aid in analyzing data. The findings reveal that the IFS enhances food security by providing households with access to mostly financial and social capital, which assist in financing activities along the agricultural value chain. The study further found that informal financial groups increase cash at households’ disposal to invest in income—generating activities and consumption. The study recommends support from government and NGOs to the informal financial sector.