Peformance assessment of semi-formal systems of credit for small scale farmers in Arumeru district, Tanzania
Loading...
Date
1999
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Sokoine University of Agriculture
Abstract
The main objective of this study was to assess the effectiveness of semi-formal
financial services in increasing access to credit by small scale farmers. The data
were collected from four villages of Poli Division in Arumeru District, and from the
three semi-formal financial institutions offering credit to the interviewed small scale
farmers. The specific objectives were to: identify/characterize semi-formal sources
of credit in the study area; assess the different types of credit required and obtained
by small scale farmers; determine the characteristics that discriminate users and nonĀ
users of credit from semi-formal services; describe the procedures and conditions for
accessing the credit from these institutions; and to determine the utilization of credit
from semi-formal sources and to what effect. One hundred small scale farmers (50
with credit and 50 without credit) were interviewed using a structured, pre-tested
questionnaire. The analysis was carried out by using the Statistical Package for
Social Sciences (SPSS) computer programme, where means, frequencies and
percentages were established. The Cross-tab sub-program was also applied to
determine the relationship between and among the variables. This was supplemented
by a review of the available reports and published material from the credit
institutions.
The study revealed that small scale farmers can access credit from semi-formal credit
institutions, but the main problems are the long distances to the credit offices and the
difficult loan conditions. Socio-economic characteristics do not discriminate users
and non-users of credit. The basic human needs are not fulfilled, thus loanii
divergence, however, majority of small scale farmers benefit from using credit to
finance agricultural production.
From the study the following can be recommended: establishment of financial
institutions which deal also with loans for agricultural purposes; small scale farmers
should be educated on how to manage their farming business and the importance of
being credit-worthy; the government should provide its people with essential welfare
services (health, education); and also a reliable market or processing industries
should be established so as to avoid losses during harvestTHESES
Description
Thesis
Keywords
Effectiveness of semi-formal, Financial services, Small scale farmers, Socio-economic