Access to bank credit by smallholder farmers in Tanzania: a case study
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Date
2018
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Journal ISSN
Volume Title
Publisher
Afrika Focus
Abstract
Tanzania like many other developing countries is highly dependent on agriculture for income generation and job creation for its citizens. Because the sector is mainly composed of smallholder farmers, lack of finance remains the leading obstacle to development. This study seeks to determine
factors that affect access to bank credit by smallholder farmers in the Mvomero District of Morogoro, Tanzania. The study used a cross-sectional design, with data being collected via the survey method. Purposeful sampling was used to obtain the respondents who fitted into the study
objective. The data were analyzed using descriptive statistics and a logistic regression model. The logit regression model in particular was employed to determine factors that affect smallholder farmers’ access to bank services. The study reveals that the value of assets invested in farming
activities, education and gender are significant factors affecting smallholder farmers’ access to bank credit. Policy recommendations include the establishment of a government bank that would exclusively provide financial services to agriculturalists by establishing a credit guarantee scheme, and the development of new financial products by the banks that would cater to the needs of smallholder farmers.
Description
A research article submitted to the Afrika Focus — Volume 31, Nr. 1, 2018 — pp. 241-256
Keywords
cross-sectional design, access, bank credit, smallholder farmers, logit regression
Citation
APA