THE RURAL ECONOMY

CUSTOMARY LAND TENURE

This is the oldest form of land ownership in Uganda and still remains dominant in the eastern and
northern part of Uganda. The ownership of land is invested in an individual or community and
continuity of ownership is passed on by inheritance pattern. The inheritance pattern ensures that
there is no danger of someone who have no land. However, women are not allowed to own land.
Under individual customary one is given much boundary on the basis of being the fathers son
and such land is passed to the male descendant.
Under the communal land tenure, land belong to the community. Anybody is free to use it for
grazing, cultivation and whatever is deemed fit for the community. Ones use of the land doesn’t
stop another member of the community from using that land.
MAILO LAND TENURE
This is a system of owning land which involve ownership of registered land for a period of time.
These are large chunk of land which were given to Buganda Royal and Chiefs by the colonial
government.
The 1998 land act recognizes ownership of land to be different to the thing found on the land and
the land owner would protect and organize the right of the tenure. Here because the land owner
cannot have utilized the whole piece of land, he grants other people to utilize the land for a
temporary of long term basis for a fee in Buganda known as “Busulu”.
The challenges in this method is that it encourages development of temporary human settlement
and excessive control by the land owners.
FREEHOLD TENURE
This is a system of owning land which involve owning of registered land for unlimited or
indefinite periods.
I this system the owner of the land has full power of ownership. This mean that the holder of the
land can do anything with the land as long as it is not against the law example, developing the
land for any purposes, grazing, settlement, rent it out, give it as a security, donation, give it as a
power of will.
However, the freehold tenure is subjected to, the town and country planning Act and or the
National Environment Statue.
LEASEHOLD TENURE SYSTEM
This is created either by some agreement made by the owner of the land the person entrusted in
having or using the land or by the law.
In leasehold tenure system, an agreement is reached between the leaser and the lease will enjoy
excessive possession of the land for a specific period on specific terms either short period of 49
years or long period of 99 years.

IMPLICATIONS OF LAND TENURE SYSTEM ON LAND UTILIZAION

1. In freehold and leasehold, there is security of tenure and women now have access to
land.
2. The possibility in acquiring certificate of ownership especially in the freehold and
leasehold meant that land can be used as collateral security and this makes land of more
economic value.
3. The Mailo land tenure separates the ownership of land from what is on the land and this
helps protect the prosperity of the tenant who live on the land.
4. The land tenure system especially customary reduces the possibility of the people being
landless. This is because apart from the female everybody is entitle to get land.
5. The leasehold tenure helps ensure the use of otherwise will be a redundant land.
6. Subjecting land holding and utilization of land to the relevant laws helps ensure
sustainability and efficiency to the use of land. However;
i. The problem customary land is that there is no security of tenure and it is not possible to
prove ownership.
ii. It is segregative that is women do not own land.
iii. Under the customary, it is difficult to lease it out or sell.
iv. The Mailo land tenure system brings conflicts between the land owners and the tenant
and his affects security of tenure.
v. The Mailo land tenure affects development.
vi. The emphasis in the land act that land belong to the people is retrogressive to
development.
FACTOR THAT INFLUENCED LAND USE PATTERN IN RURAL AREAS

Land use patterns in the rural areas are determined by a number of factors. These include;
1. Culture. This determines the types of settlement, economic activity etc.
2. Climate. This determines whether one is going to be an arable farming or pastoralists, the
type of crops to be grown.
3. Relief. Most land use activities are done on the main slope like crop cultivation, settlement
and the steep slope should be avoided.
4. Population. Increase in population affects land use and may change land use types.
5. Planning. This affects the kind of land use.

RURAL DEVELOPMENT IN AFRICA

Rural development is a change in the structures of the opportunities that the people in the rural
areas avails 'themselves with and improve their standard of' living. Example employment,
trading, education, health opportunity and available of more infrastructure like water and road
network.

Rural development can also be looked at as the transformation or economics changes of cultural
institution as well as life style of a rural people from the lower to the higher standard of living.
Rural development is characterised by the following indiactor;
1. Availability and increase in employment opportunities in the formal and informal sectors
in the rural economy.
2. Rural development should ensure equality and distribution of resources, income among
the household for a better standard of living.
3. Rural development also looked at the increase of growth and development in the level of
saving and investment to promote trade and economic development.
4. Observant and maintenance of law and order and fastening the spirit of positivism and
unity and adherence for human right and freedom for human living.
5. Rural development is evidence through increased production and productivity in all the
sub-sector of rural economy.
6. Improved infrastructure and institutional framework which facilitate the production of
goods and services and the implementation of administrative role in the various areas.
7. Rural development also characterized by emergence of formal employment opportunities
and improvement in human resource capacities, diversification of social economic activities
widens the opportunities of improvement of livelihood, technological advancement and
promoting affirmative action and gender recognitions and balance.

IMPORTANCE OF AGRYCULTURE IN RURAL DEVELOPMENT

This is because agriculture is the predominant socio-economic activity among the rural areas or
it is belief that the change in the rural initiate as directly related to agricultural development.
Therefore, agriculture is important in the following ways;

1. It is a source of food for the people.

2. It is the main source of income for the people in the rural areas.
3. It is the source of productive and intermediate raw materials.
4. It provides intermediate markets opportunity for other sector in the economy
5. It facilitates saving among the rural people
6. It's the major form of land utilization
7. Agriculture attracts development and an establishment of social economic
infrastructure and services.

THE NEED FOR RURAL DEVELOPMENT

Rural development is important in the following ways;

1. To enhance exploitation and utilization of potential available resource for the benefits
of man's survival

2. Developed economic as characterised by creation of employment opportunity in both

formal and in formal sectors,

3. It encourages diversification of economic activities.

4. In economy that experience sustainable development is also characterized by an attempt

to reduce social-economic nepotism between rural-urban people and even among rural
population.
5. Rural development should consider general economic development and characterisers by
fair competitiveness among the members especially between urban and rural areas
promoting effective and wide provision of goods and services.
6. As the result of rural development, diversification of economy and economic pressure
is reduced. This create environment for innovation and intervention in different sectors.
7. Rural development leads to general improvement and conditioned for institutional
framework which facilitate easy flow of goods and services within the economy.
8. Also as the result of various economic activities in the rural sectors which lead to the
widening of the tax based and capacity of the rural people to pay tax which is the major
source of government revenue for both local and national development.

9. As the result, the ultimate goal of fastening the rural development is to promote
economic and development but more particularly with the focus of alleviating poverty
and improves standard of living of rural people.

FACTORS THAT PROMOTE RURAL DEVELOPMENT

The following are the factors that promote rural development.

1. The aspect of population. The aspect of people moving or migrating or migration of

people from rural areas to urban areas which facilitate the exchange of ideas and adaptation of
new skills from other parts of the country or different regions.
2. Another factors which tend to promote the rural development is the issue of gender
balance which open up the windows/opportunity for managing the society which help to
improve on the developmental skills.
3. Rural development can be promoted using peace and harmonization which are vital
factors in promoting economic development and also facilitate institutional participation where
security is provided and this attracts nice important investment in all socio-economic
development.
4. Rural development can be promoted through positive and supportive government policies
eg decentralization, liberation, prioritization. local and regional development etc. Promotional of
export and imports, diversification of economy, participation and promotion, provision of
opportunity for socio-economic activity leading to a development.
5. Availability of capital and socio-economic development which could be provided by
local people or local government or central government or external providers etc.
6. Access to better education and better health and promoting general conditions for healthy
living for rural populations.
7. Initiative to open up a new and wider markets for local products which attract increased
productivity among rural areas.
8. Diversification of production and rural actions for eg promoting local tourism that is one
aspect.
9. Strategic planning and evaluation of development goals and this initiate constant rural
development.
10. Sensitization and mobilization of rural people to appreciate development by using
cooperative society.
11. The availability of donor funds and support as very necessary with clear development
and clear strategies for development.

CONSTRAINTS TO RURAL DEVELOPMENT

1. High level of illiteracy and ignorant among the rural communities arising from poor or
limited education and sensitisation which are characteristics of poverty and under
development.
2. Rampant political conflicts, wars and instabilities, hatred among or between different people
of different ideology affecting development project in an area.
3. Prevalence of diseases or epidemic especially Ebola, malaria etc. largely affects the
productivity of people in rural areas. This affects the overall economic performance and
development in the rural areas. Example Uganda, Angola, Zimbabwe which have suffered
from that.
4. The poor infrastructures and institution development especially the road network, power and
energy, inadequate telephone network and social service provision. This hinder the
development of an area.
5. The syndrome of corrpution and embezzlement of funds and inappropriate and
misappropriation of resources which cut access to various initiative among African economy
by the local, central, central government etc.
6. The rural urban migration affects the development of a particular areas by increasing the
population the ban areas and reducing the population in rural areas.
7. Different cultures and beliefs of people in different rural areas in most eases negatively
affects the development initiative example some of them are backwards cultures which
hindered a new method of development.
8. Natural disaster and calmatives and unpredictable circumstances like floods, drought. disater
affect natural environment and hence affect rural development.
9. The limited capital required to establish the activity in the rural areas due to lack of exposure
to education and culture.
10. Low level of technological development as a hindrance to rural development in all
sectors including agriculture, processing and manufacturing, transport and all aspect of
technical development.
11. Poor assessment or appraisal of the rural needs. This make the government to think on
behalf of the rural people which creates gaps and wasting resources.

COURSEWORK QUESTIONS
1. Select any one development intervention and assess its contributions in changing the
rural lives.
2. To what extent is communal land ownership a major cause of poverty in rural areas
today.
1. Discuss the merits and demerits of communal landownership.

THE ROLES OF STAKEHOLDERS IN RURAL DEVELOPMET

The process of rural development is a collective effort that call for the involvement of different
stakeholders at different stages. There are some of the stakeholders that directly or indirectly
involved in the function of achieving rural development. Example the government itself, with
her different leaders, the donors, the local government, the central government, the local community,
the rural population or land users, planners or community development officers (CDOs), business
community, micro-finance agencies, religious organization, the cooperative organization example,
MTN, PEPSI, COCACOLA etc.

THE ROLES OF GOVERNMENT IN RURAL DEVELOPMENT

it is important to recognize the central government as a key stakeholder in efforts and initiative that
are directly towards rural development.

The national development goals are achievable through development and implementation of
government programmes or projects in communities. Such government programmes are intended to
improve the lives and standard of living of the rural people therefore, the government performs the
functional roles as follows;

1. It provides administrative functions through its local government structures and authorities
from the central government, community development officer (CDO) are linked to all the
development programmes example, agriculture, education, security, health, gender and other social
services as directed by the chief administrative officer (CAO) at the district level.
2. Government invest capital for the development infrastructures and institutions for example,
construction of roads, schools, hospitals, springs or well which are part of the social amenities required
by the community to improves standard of people in the rural areas,
3. It's also the role of the government to provide technical advice by providing technical people or
technicians to help community in their community development projects, income generating projects,
educations, health, environmental protections, sanitation and advice on the general being of the rural
people. As such the government bears the responsibility of investing of initial education and people
who will provide the technical advice to the others.
4. Government is also expected to offer extension services particularly agricultural extension
services through its nation-wide programmes example, Uganda-government through programme like
NAADS, operation wealth creation (OWC) projects and extension for agricultural farmers which
should include new technology and better advice, mobilisation, sensitisation and the provision of
market infrastructures relevance for the sale and purchase of input and output.
5. It is also a responsibility of the government to ensure implementation of the overall national
development goals example, eradication of poverty, illiteracy, fighting, malnutrition, provision of safe
water, sanitation, promote hunger free state.
6. The government is supposed to have the responsibility of supervision and evaluation of all
government programmes which are meant for rural development in rural areas.

7. Government is also to provide security and peace or freedom if development is to be

realised. It must ensure law and order, ensure harmony in the security through its security
organisation.
8. Government should also promote justice observance of human rights, and freedom and
all allow democratic system to operate as a football game.
9. Government must have a policy that make a development strategy which are promoted
through a few process and evaluation for example, environmental impact assessment (EIA) to
assess the environment.
10. Government must also carryout scientific research at global, regional and national level
through its research agencies and institutions NARC, student works at advance levels
(institutional research).
11. Government should provide finances development activities and facilitates financial
intermediate to finance the programmes in projects example operation wealth creation
(OWC).

QN. The government has contributed a lot to the development al rural areas. Discuss

RURAL POVERTY
Poverty is one of the leading challenges to the realization of higher levels of development in a
country. Poverty is synonymous with under development. The poor countries are usually under
developed whereas the underdeveloped countries are poor.
Poverty is defined as the situation where the total income is insufficient to obtain the minimum
necessities of life.
The worlds development report (1990) defines poverty as the inability to attain a minimum
standards of living.
Poverty refers to social economic situations characterised by lack of or limited access to tools
control of basic necessity of life as well as inability to afford the basic needs of man's survival.
Poverty is a state of powerless and deprivation of basic resources to foster a better or minimum
standard of living.
Poverty can be categorised into two ways;

1. Absolute poverty/ extreme poverty/ super poverty

The worst form is called chronic poverty and it is characterized by vicus cycle of poverty.
Therefore, absolute poverty is a functional situation whereby household, a society, community
are not able to acquire or afford the primary needs of life. This is absolute poverty since, this
household lives below the poverty line.
Absolute poverty is characterised by a severe lack of the basic necessities of life. It is total
poverty in itself.

Absolute poverty is measured not only by low income but by malnutrition, poor health, clothing,
shelter, lack of education etc. thus absolute poverty is reflected by low standards of living of the
people.

The World Bank defines a poor person as someone who spends less than 1 dollar a day.
According to national statistic of Uganda (2006), 30% the population of the world live below the
poverty line. That is people who cannot afford the basic needs of their life.

The majority of the people below the poverty line to the rural areas and this is because of limited
lively job opportunity in the rural areas compare to urban areas. The situation is even worst in
northern part of Uganda just as any other war regions or war affected regions in other parts of
Africa. Example Somali, Niger, Liberia, South Sudan, Central African Republic etc.
The northern Uganda, it's because of long stay of L R A wars and the percentages of people
below the poverty line as- much higher compared to other parts of the country.

QUESTIONS.
1. Distinguished between absolute poverty and relative poverty.

2. Justify the view that all the population of northern Uganda region is traumatised.

Pts
 Decline in performance
 High crime rates
 High death rates
 High school drop out
 High resistance in politic
 High level of domestic violence
 High rate of mental illness
 Unfair treatment (injustice in the work places)
 High level of land wrangle

2. Relative poverty/Comparative poverty

This is a form of poverty whose situation/ condition is much better of compare to extreme poverty. It is
characterized by comparing levels of poverty between individual, regions, country, even continent.

It is important to note that rural poverty is the major causes of the rural under development especially
in the economic developing country. The state of rural poverty is characterised by the following;

1. Low household income which is also un predictable at certain level and irregular.
2. Poor standard of living. High level of deprivation in terms of resource ownership, access to
control of resources and power.
3. High level of illiteracy due to limited education opportunities mostly voluntary.
4. Poor water and sanitation condition.
5. Subsistence production is common
6. Poor and limited infrastructures and institutional framework which are also poorly
maintained due to limited resources.
7. There are high fertility rate and high mortality rates including infant mortality and maternal
mortality and general low life spans.
8. There is inadequate medical care and low health level.
9. There is state of wars and conflicts or sometimes strict or misunderstanding which also
affect the level of poverty and also hinder investment.

10. Rural characterised by lack of access to major social-economic services and basic
information requirement for the rural development.
Question

1. The rural areas are underdeveloped because the people are poor. Discuss.

2. Discuss the characteristics of the state of' rural poverty

According to (2006), states of Uganda's population report, the relative numbers of those living in
abject poverty increases to 38% from 35% in (2000). The proportion of people living below the
poverty line reduced from 56% (1992) to 35% (2000). This trend was attributed to several
government interventions in the form of policy and public expenditure reform. However, over
the last 10 years or so poverty level has started increasing. Poverty is not just about low income
But also insecurity, poor education, poor health, lack of information, powerless, isolation etc.
therefore, poverty is multi-dimensional that is it is both material and non-material. At the level of
household. Poverty is more seriously suffered by those who lived in the rural areas and in
Uganda is more severe in the northern and eastern part of the country. In northern
Uganda, 2/3 persons are considered to be poor.

CAUSES OF POVERTY IN A COUNTRY/RURAI AREAS

1. A large subsistence economy. This is very common in the rural areas. In rural area
production are not for market and producers is the consumer resulting to low income and
poverty.
2. A higher population growth rate. This leads to a higher dependency burden and this
constrain savings and investment.
3. Physical limitation. Poverty is also attributed by physical limitation like poor soils, low
and unreliable rainfall, rough terrain, drought conditions affecting production level
4. Poor access to market. this is attributed to market rigidities, low prices for commodities,
production of similar commodities etc.
5. cultural rigidities especially cultural aspects which are anti-developmental eg nomadic
pastoralism, non-application o! fertilizers and pesticides, etc.
6. Political insecurity and insurgencies. This affects productivity levels, it destroys all the
socio-economic fabrics of society that are relevant.
7. Low level of education. The importance of education to development is twofold
Education helps to increase and expose its recipient to employment opportunities and also helps
Impart relevant skills that are important survival skills and therefore, an educated person will
always have a way out.
8. Low technology which results to low productions and low efficiency.

9. The culture of poverty. It explains that the poor are poor because they are poor. The
poor are always contented with their poverty, they look at poverty as God sent and therefore,
have no motivation to get out of that poverty
10. Neo-colonialism.

STRATEGIES TO REDUCE POVERTY IN RURAL AREAS/UGANADA

QN. Discuss how poverty in rural areas in Uganda will be reduced.

The government of Uganda in an attempt to reduce the poverty problems came up with a reforms
and structural strategies to transform the economy and people's standards of living. A number of
fragmented interventions were introduced and this include.
1. PEAP (Poverty Eradication Action Plan) under PEAP there are a number of interventions
like PMA (Plan for Mordernization of Agriculture), NAADs (National Agricultural
Advisory Services), OWC (Operation Wealth Creation).
2. Health service intervention. This arise from the fact that it I the poor who are also on poor
health. Therefore, intervention such as National Immunisation Campaign, Roll malaria birth
campaign.
3. Road sector development. This particulary focus on the development of feeder roads to help
farmers access markets.
4. Prosperity for all scheme and besides this there is specific interventions which targeted
specific regions Northern Uganda Reconstruction Programme (NURP), Restocking
Programme, NUREP (Northern Uganda Rehabilitation Programme), NUSAF (Northern
Uganda Social Action fund).
5. Reduction of population growth rate through population control measures example,
contraceptives, education, restricting marriage age etc.
6. Establishment of peace and democracy in rural areas hence, facilitating economic
development by creating an enabling environment,
7. Economic integration
8. Etc.
PLAN FOR MODERNIZATION OF AGRICULTURE IN RURAL UGANDA/AREAS
PMA is a government of Uganda’s strategic framework of eradicating poverty by transforming
the current agriculture into an agriculture which produces for market.
PIMA is-the deliberate attempt to reduce poverty in the rural area. It aroused out of the facts that
the majority of Ugandan population live in the rural area and they are basically poor, involve in
agricultural production and therefore, if there is any intervention/strategy to reduce the problem
of poverty in the rural area, then it should target the agricultural sector.
The agricultural sector in the rural area was basically subsistence with no motivation to
increase on output,
STRATEGIES FOR AGRICULTURAL MODERNIZATION
1. Strengthening Research and extension services. Modern agriculture is actually based on
generation of new technologies by researchers and transfer of such technology to farmers
through extension deliberate system. Example, or research centers in Uganda include
Kawanda, Namulonde, etc.
2. Developing of market infrastructure example feeder roads to improve farmer’s accessibility
to the market, storage facilities and other infrastructural facilities.
3. Providing skills and training for farmers. This is done through extension deliberate system
so as to improve on the agricultural methods being used.
4. Developing agro-based rural industries. These are vital because they add values to
agricultural produce example grain milling industries, milk cooling and processing, coffee
processing etc.
5. Empowering women through NGOs. This resulted from the realisation that about 75% of the
total agricultural labour force is provided by women.
6. Establishing better land policy and reforms which encourage individual ownership and
production
7. Strengthening agricultural education in schools. If agriculture in schools is given emphasis
right from the formative stage that is primary and secondary, then better skills and better
farmers will be produced.
8. Liberalization of agriculture. This is especially liberalizing the marketing system by not
restricting prices for commodities.

CHALLENGES FACING AGRICULTURAL MORDERNISATION

1. High population growth rates which leads to the problem of land fragmentation
reducing the size of land owned per person hence reducing productivity.

2. Extension services are still poor in the rural areas.

3. Market rigidities such as low prices paid for the farmer’s products. This may be as a
result of overproduction and production of the same crop.
4. Cultural attributes. Having negative feelings about improvements, limited abilities to
move with positive change example refusing good breeds of both crops aid animals.
5. Increasing rural-urban migration. This tends to result into more youths moving to towns
leaving agriculture in the hands of the old whose productivity levels are low.
6. Poor land tenure system example land fragmentation, Mailo land system where land
belongs to the kings and chiefs, Communal land ownership which limits personal
development. 7. Limited capitals to purchase farm equipment etc.

8. corruption and mismanagement of funds

9. Pest and diseases.
10. Poor soils

ACHIEVEMENTS OF AGRICULTURAL MODERNISATION

1. There is increased agro-processing and therefore, value addition example, grain millers,
sugar cane factories, ginneries, etc.
2. There is some increase in commercial agriculture example market gardening, zero
grazing etc.
3. Increased variety of agriculture export commodities. Besides, the traditional export there
are more exports such as honey, flowers vanillas etc.
4. There is improved development of road networks in the rural area and this is increasingly
giving farmers access to the market.
5. Increased international and regional cooperation which is of benefits to agricultural
development eg AGOA (African Growth Opportunity in America), COMESA (Common
Market for East and southern Africa).
QN. Examine why poverty has continued to persist in the rural areas despite a number of
interventions. (20marks) interventions (20 marks)

LANDUSE AND LAND ISSUES IN RURAL AREAS

INFORMAL AND FORMAL INSTITUTION IN UGANDA

INFORMAL INSTITUTION

Def; Informal institutions are those that are not structured, not legal and are governed by rules

And regulation. Example SACCO groups.

FORMAL INSTITUTION

Are those which are structured, influenced by government and governed by laws examples,
schools, hospital, financial institutions (banks), limited company.

FINANCIAL INSTITUTIONS

Financial institution or intermediary are at the point between borrowers and lenders. Lenders
usually have cash supplied from the borrowers.

The formal financial institutions are those registered and regulated by bank of Uganda and the
financial act of 2006 and they include the following;

i. All commercial bank

ii. Development bank
iii. All insurance cooperation
iv. All micro deposit and lending institutions
v. All micro-finance institutions

CHARACTERISTICS OF FORMAL INSTITUTIONS

1. They employ professional bankers and governed by professional management system.
2. They are urban or town based in their operations
3. They mostly often serve the interest of the rich population
4. They exhibit high level of customer care to their clients eg directive postures etc.
5. They charge relatively low interest rate in their loan compare to microfinance.
6. They lend relatively bigger amount of loans 'to individual borrowers with security or
collateral.
7. Their network is modern and high level of technology to improve on their information
management decision making, service delivery and customer satisfactions.

8. Their institutions command high level of administrative and management structures

and processes produces efficiency to enhance their effectiveness.

9. They are mainly profit driven and oriented.

10. They have high level of cooperation with significance position in the society (highly
respected).
11. They also involve in advertising so that customers come at recommended level.
On the other hands, informal finances are those that have not directly stipulated or
advised by the bank of Uganda. Like micro deposit money lenders, circles saving,
accumulated saving association, village bank, community bank, credit schemes and credit
unions.

THE CHARACTERISTICS OF MICROFINANCE

The characteristics of microfinance are as follows;
1. Many of these are semi-urban and rural based
2. Their services are economically poor
3. They charge relatively high interest rate
4. They extend smaller amount to their customers
5. Their security or collateral are given inform of guarantors and social liability
6. They are informally managed and administered with less professional consideration

Note that, informal institution emerges in the market because of the different agenda.

SOURCES OF FUNDING OF MICRO-FINANCE INSTITUTIONS

1. Donors funds inform of loans and grants
2. It can also be a government loan and grants
3. It could also be loan from commercial bank
4. Accumulation of saving deposits and interest in saving
5. Shared capital provided by shareholder

LENDING METHODOLOGY IN MICRO-FINANCI

There are two main lending process.
1. Group lending; whereby money is given to a group of 50 members or more and each
members provide security for others example BRAC.
2. Individual lending; this is where loan is given to an individual with some element of
security or collateral and locally the loan amount is bigger,

THE ROLES OF MICRO-FINANCE IN RURAL DEVELOPMENT

1. They provide financial services in terms of loans to keep start or expanding business
enterprises.
2. They mobilise saving from the consumer by instilling in the community members interest of
saving culture.
3. Micro-finance directly create job by employing community members within the areas such
as manger, credit officers, etc.
4. Micro-finance institutions provide micro-finance insurance products to cover their plight
and the products extended to them.
5. They mobilise, train and sensitized clients on the line of issues.

TYPES OF LOANS
1. Short term loan

This is a small loan that run for a period of not more than one year.

2. Medium term loan

They are loan that run for a period of two to three years.
3. Long term loan
This run for a period of 5 (five) years and above.

4. Character loan
They are loan given depending on one character.

5. Secure loan

These are loan given against collateral or security eg log book, land title etc.
6. Unsecured Loan
These are loan given without collateral or security (risky loan)
7. School education loan
This is the loan given for education purpose eg to offset school fees
8. This is the loan given for business purposes.
9. Mortgage loan

This is the loan for real estate development eg. buy land, building etc. the period for payment is
long.
10. Agricultural loan
This is the type of loan given to farmers and its given for farming either as a group or individual.

RURAL URBAN MIGRATION (RUM)

Migration throughout developing world often associated with rural to urban population transfer
and movement of people out of agriculture into industries and services occupation.
Economic forces are the leading motive in cases, Migration is found to reduce the rural
population. The wide indicators show that general it has severe constraints on the social and
economic structure in many communities. There is usually free migration through individual
decision making where migrants seek personal upward economic and social mobility. The
assumption is that an individual decision maker is either aware of or unconcern about the
potential push.
The potential migrant seeks his social and economic responsibility and rest only on the family
farmers who see their local problems tackled with an increasing affectionate decrease
confident in the rural areas.
FACTORS THAT INDUCE MIGRATION
They can be explained in the combination of push and pull factors for example, economic and
demographic, sociological, psychological and political. However, today the relative economic
motivation makes people to move from rural to urban.
In rural Africa, the economic factor especially employment, underemployment, poverty,
underdevelopment continue to be the serious problems in rural areas. These therefore, continue
to be the major factors for rural migration.
In Asia, the followings are some of the factors;

The disparity which were greatly generated with colonial exploitation.

The rural areas were generally denied social amenities example, clean water, hospital, schools
etc.
QN. Explain the effects of rural-urban migration to either a place of origin or destinations.
Causes of rural-urban migration
 Population increase in the rural areas
 Needs for luxuriant things
 Bad cultural practices eg circumcision in Bugishu land
 Epidemic diseases like Ebola
 Famine
 Band wagon
 Neutral calamities eg earthquakes ect.
 Conflicts
 Land wrangles
 Government policies eg national park, industries
 Poverty
 Employment

Qn. a) What is the relationship between migration and environment (5mks)

b) Elaborate on the assertion that Uganda’s population is more of a liability than an asset.
(15 mks)
MARKETING IN RURAL AREAS
Definition; marketing refers to all those process of which goods and services are exchange
between buyers and sellers.
These involue the transportation of raw agricultural produce or material (raw materials) or
products at the farm into consumable.
Marketing also involues related activities and process for example transporting, grading,
standardizing, processing, packaging, labelling, advertising, selling and buying at a given at a
given price.
Marketing can also be defined as the art of buying and selling of goods and services at a given
place at a market given price.
Market can be identified and classified as follows;
i. Time example 8:00am – 6:00pm etc.
ii. Trading policies management example taxation etc.
iii. Location example near goods are expensive, far goods are cheap etc.
iv. Commodities like quality, cheap, expensive etc.

All these determines the price of commodities When marketing produce, much of it will be
determined with factors of demand and supplies.

If the price is higher, the quantity demanded will be low, when the supply is higher, the price will
be lower. Therefore, the market price tends to moves towards the equilibrium since it is not easy
for the seller to decide the equilibrium price (the price at which sellers together are willing to sell
the same amount as buyers together are willing to buy, also known as market clearing price).
and the equilibrium quantity (the amount of that good or service that will be produced and
bought without surplus/excess supply or shortage/excess demand) of that market.

Supply and demand

D
S

Price p
Quantity q

FUNCTION OF MARKETING
There is task which must be performed if marketing is to take place.
i. Buying and assembling