Linking rural entrepreneurs to financial services: a case of private agriculture sector support (pass) LTD
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Date
2007
Authors
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Journal ISSN
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Publisher
Sokoine University of Agriculture
Abstract
The provision of credit has increasingly been regarded as an important tool for raising the
incomes of rural populations, mainly by mobilizing available natural resources to more
productive uses. The rural population has for many years been serviced by the informal
financial sector. Meyer and Nagajaran (2000) define informal financial sector as including
farmer credit from traders, input suppliers, moneylenders, friends and relatives and
Rotating and Saving Credit associations (ROSCAs), which are not supervised by the
national financial authorities.
This informal sector work on loan advances in short term deferred payment system. The
credit is advanced to farmers by any of the above mentioned informal service providers
and the repayment is usually in form of crops produced upon harvest. Since many farmers3
can't afford to store their produce due to cash requirements, receive poor payments, which
do not enable them to retain enough proceeds to facilitate the next planting season.
In the recent past, there has been an increased tendency to support agriculture aimed at
formation of small-scale agribusinesses. Braverman and Guasch (1986) found that despite
the efforts to overcome the widespread lack of credit facilities, especially among
smallholders, and the expansion of credit in the rural areas of poor countries, the majority
still have only limited access to credit services to support their operations.
Seeing this prospect the Private Agricultural Sector Support (PASS) was established under
the Agriculture Sector Programme Support (ASPS) Programme (funded by DAN1DA) in
2000 with the aim of bridging this gap by providing financial linkage and business
development services to the rural entrepreneurs. These services aim at promoting rural
agribusiness by linking the agribusiness men /women to the banking services (URT, 2003).
This research paper was aimed at examining the effectiveness of the PASS objectives with
the view of establishing their role in determining the access of rural small-scale farmers to
financial services.
Description
Master of Business Administration in Agribusiness
Keywords
Rural entrepreneurs, Financial services, PASS, Tanzania