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Access to Bank Credit by Smallholder Farmers in Tanzania: Challenges, Opportunities and Prospects: A Case of Mvomero District

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Show simple item record Madafu, Elias G. 2020-07-09T14:43:08Z 2020-07-09T14:43:08Z 2015
dc.identifier.citation APA en_US
dc.description A Research Report Submitted in Partial Fulfillment of the Requirements for Award of the Degree of Master of Science in Accounting and Finance (MSc. AF) of Mzumbe University en_US
dc.description.abstract Tanzania like many other developing countries highly depends on agriculture for income generation and job creation for her citizens. Owing to the sector being highly dominated by smallholder farmers, lack of finance remains the leading obstacle and yet banks – the major supplier of finance are quoted to be the least suppliers of finance to farmers despite capital adequacy and ability to lend to smallholder farmers at lower interest rates compared to other suppliers. This study therefore aimed at determining factors that affect access to bank credit by smallholder farmers; analyzing the influence of access to bank credit on the performance of smallholder farmers; examining obstacles encountered by smallholder farmers in raising bank finance and finally assessing perceptions of banks towards lending to smallholder farmers in Tanzania. Methodologically, both qualitative and quantitative research approaches were utilized in the study. Data from 162 smallholder farmers in Mvomero Districts and 3 banks operating in Morogoro region was collected and used in examining accessibility of bank credit to smallholder farmers, while descriptive statistics and the Logit regression model were employed for analysis. The Logit regression model was particularly utilized to determine factors that affect smallholder farmers‟ access to bank credit while descriptive statistics were used to analyze the obstacles and influence of access to bank credit on smallholder farmers‟ performance. The study revealed that the value of assets invested in farming activities and education were significant factors affecting smallholder farmers‟ access to bank credit and; lack of collaterals, vital bank information, proximity to banks and high interest rates were some among the major obstacles hindering smallholder farmers‟ accessibility to bank credit. Further still, access to bank credit was found to have a significant influence on the performance of smallholder farmers as it influenced both output and increase in annual returns. Among others, it was recommended that the government should establish a bank that will exclusively provide financial services to agriculturalists by establishing a credit guarantee scheme. It was also recommended that banks should develop new financial products that will cater for the needs of smallholder farmers. en_US
dc.language.iso en en_US
dc.publisher Mzumbe University en_US
dc.subject Access to Bank Credit en_US
dc.subject Smallholder Farmers - Tanzania en_US
dc.subject Mvomero District en_US
dc.title Access to Bank Credit by Smallholder Farmers in Tanzania: Challenges, Opportunities and Prospects: A Case of Mvomero District en_US
dc.type Thesis en_US

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