Community Group Saving and Lending (CGSL) mechanisms have become an important informal financial system for rural households in post-war South Sudan, particularly where formal banks, microfinance institutions and agricultural credit providers remain concentrated in urban and peri-urban centres. This article examines how the working-capital orientation of CGSL-financed loans shapes agricultural investment decisions among farmers in Eastern Equatoria, Jonglei and Lakes States. It specifically asks why groups that successfully mobilise savings and provide seasonal credit still struggle to support long-term agricultural investment in land improvement, machinery, irrigation, storage and modern inputs. The analysis draws on a mixed-methods thesis dataset consisting of 85 targeted survey respondents, 81 valid survey responses and 17 interviews. Descriptive statistics, mean-score comparison, chi-square testing and logistic regression were used to examine the relationship between credit access, agricultural productivity and investment in modern technologies. The findings show that respondents rated scarcity of working capital very highly (overall mean = 4.68), while long-term investment in land, machinery and infrastructure received a much lower mean score (3.51). Access to credit was statistically significant in the logistic regression model (β = 1.9459, p = 0.026), confirming that credit matters for technology-related investment. However, the structure of available credit appears to favour short-term production cycles, consumption smoothing and immediate input purchase rather than patient capital formation. The article argues that CGSLs are necessary but insufficient institutions for agricultural transformation unless they are linked to longer-term finance, extension services, risk-management instruments and enabling rural infrastructure.
Toch et al. (Mon,) studied this question.
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