THE EFFECT OF CREDITS ON SMALL SCALE FARMERS PERFORMANCE IN TANZANIA:

Abstract

This study was conducted to assess the effect of credits on small-scale farmers’ performance in Tanzania a case of Meru district. The survey research design was used to reach respondents to gather primary data in this study. Simple random sampling was used to sample small-scale farmers in area to fill the study. The findings shows that small scale farmers with high coefficients of collateral properties (0.61), farmer income before credit (0.015), level of education (0.15) and level of savings within MFI’s (0.09) were likely to have more access to credit than others. However, the negative coefficients of family size (-.21), age (-.1.38), small-scale farmers occupation (-.17) and gender (-.03) shown that they were less prospective to access to credit. Also, accessibility to credits assists farmers to meet the basic factors of production and relish themselves all the market compensations. It allowed small-scale farmers to access the agriculture inputs, competent labour, seeds, agriculture markets and other advantages deprived of any intermediary burdens, which all positively contributed to high productivity. Further, the results of this study have revealed that access to credit rose up the income thresholds for the small-scale farmers’ production. Furthermore, the study in the area found that small-scale farmers had ability to enlarge and grow more field for agriculture production as the results of acquired credits. Credit availability to small-scale farmers will realize their farming efficiency and increase their performance through getting advanced tools, skills, and knowledge and become exposed to contemporary farming system.