Analyzing the Effectiveness of Subsidized Credit Facilities on Business Operating Capital and Production Growth in Selected Towns

The study analysed the role played by subsidized credit facilities on the business operating capital and production growth of small and medium enterprise agribusiness in selected towns. The study sought to assess the effectiveness and extent to which subsidized credit facilities impact the growth of operating capital and the exact capacity that agriculture input supply among the agribusiness circles. Using a quantitative approach, data were collected from a sample of 107 agri business respondents drawn from Choma, Kalomo and Lusaka through structured questionnaires, supported by semi structured interviews and the analysis of the responses was done using Microsoft excel with the mega stat statistical add in which the researcher used for the purpose of computing descriptive statistics, hypothesized mean test and simple regression analysis. From the tests done, the contribution of subsidized credit to operating capital was proved to be strong and statistically significant. t=57.07, p<0.001 )The negative sign reflects a mean rating of 1.13 againts a neutral value of 3, where lower case scores indicate a stronger positive contribtuion, with 86.9% of the respondents reporting that there was growth above 50% and all respondents (n=107) further reporting an increase in the volume of inputs supplied, 85% (n=91) by more than 50%. Further, even though subsidized credit was associated with an expansion in supply volumes, the production side was more qualified because. Only 13.1% (n=14) of dealers reported that they always met seasonal demand from farmers, and the perceived contribution of credit to supply volumes did not significantly predict the reliability of meeting demand, F(1, 105)= 1.18, p = 0.280. The study concluded that subsidized credit facilities strengthen the working capital of agro dealers more consistently than they improve the reliability of input supply to farmers. The study recommends that credit disbursement be paired with storage, logistics and support to make this service reliable