Abstract:
Access to agricultural credit is critical for the economic
sustainability of smallholder farmers, particularly in
developing regions like Tanzania. However, many
smallholder paddy farmers in Mvomero District face
significant barriers when trying to secure financing
essential for improving productivity and livelihoods. This
study investigates the enablers and obstacles influencing
agricultural credit accessibility for these farmers. Using a
mixed-methods approach, data were collected from 274
farmers and key informants, revealing that prior loan
experience plays a significant role in facilitating credit
access, with 80.7% of respondents indicating previous
loan engagement. Additionally, secure land ownership
was found to correlate with better credit terms, as those
with formal titles reported a mean score of 3.12,
highlighting the importance of land tenure in their
borrowing experience. Despite the high level of
engagement with credit markets, considerable challenges
remain, with mean scores of 2.98 and 3.14 suggesting that
interest rates and collateral requirements are perceived as
substantial barriers to accessing credit. Furthermore, trust
and reputation emerged as pivotal factors in loan
procurement, with 73% of farmers expressing willingness
to seek additional credit, which reflects a generally
positive outlook on borrowing. These findings
underscore the urgent need for tailored financial
education programmes and supportive policies aimed at
enhancing lending practices and improving access to
capital for smallholder farmers in the region.
