Access to Agricultural Credit for Smallholder Farmers in Shinyanga Region –Tanzania

Abstract

This paper analyses the access to agricultural credits for smallholder rice farmers in ShinyangaRegion- Tanzania. Specifically, it describes thesources of credit facilities available to the rural area and the factors determining access to agricultural credit in the study area.A multi-stage random sampling technique was used. Two district councils that were the largest producers of rice were purposively sampled; these include Shinyanga and Msalala. A total of 180 rice farming households were selected from the smallholder farmers using a simple random sampling technique.Data on demographic and farmer-household socioeconomic characteristics that are likely to affect small-scale farmers' decisions to take out agricultural credit were collected using a semi-structured questionnaire. In this study, descriptive statistics and the logit model were used. The study revealed that sources of agricultural credit were cooperative institutions, personal savings, individual money lenders), relatives/Friends, Microfinance Institutions, and Commercial Banks. Furthermore, the study found that factors such as gender, household size,household income, membership in cooperative institutions, land size, and asset value positively influence agriculture credit in the study area. However,age and livestock ownership found to havea negative influence in accessing agricultural credit. The study recommends that farmers and cooperative stakeholders insist that farmers form the self-help groups like cooperative institutions asthe compatible source of agricultural credit in the rural area.