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Abstract
ABSTRACT
Tanzania is currently experiencing a significant growth in population with potential food shortages predicted in the next few years. Global warming is causing a serious threat on food production because lands used for agriculture can no longer produce food. As a result of this, food prices are raising sharply causing an adverse effect in the economy where the standard of living is now very high. As a way to address this problem, the Government of Tanzania has prepared a “Kilimo Kwanza†initiative which aims at revolutionizing agriculture to increase food security in the country. Access to agriculture finance is one of the pillars of this initiative.
In this regard, the study examined challenges facing agriculture sector in accessing credit from financial institutions using horticulture subsector as a case. It examined factors that make agriculture financing risky and evaluated the gap that exists between farmers and financial institutions. Furthermore it evaluated strategies used by financial institutions to give credit to farmers and examined the impact of financing agriculture in Tanzania. This was a qualitative study which used a sample of 48 respondents from the two active horticultural production regions in Tanzania, Arusha and Kilimanjaro.
The study revealed that agriculture financing is an important catalyst in stimulating agricultural development to ensure food security in Tanzania. Unpredictable weather, lack of collateral, absence of agriculture insurance, little farmer’s education, infrastructure and fluctuating market prices are among factors which makes agriculture financing risky. It found that there is a big gap between small scale farmers and financial institutions mainly due to geographical distance between the two parties, availability of alternative sources of finance such as SACCOS, VICOBA and competition from mobile money services such as M-PESA. In assessing the impact of agriculture financing, the study revealed that there has been significant achievements in horticulture through support from the government and donors. The study therefore recommends that, the Government of Tanzania should invest more resources to ensure access to credit is not a challenge to farmers while financial institutions should develop products and services customized for agriculture giving priority to small scale farmers##plugins.themes.academic_pro.article.details##
How to Cite
Mwakanemela, K. (2014). Challenges Facing Agricultural Sector in Accessing Credit from Financial Institutions The Case Study of Horticulture Subsector in Tanzania. International Journal of Emerging Trends in Science and Technology, 1(05). Retrieved from http://igmpublication.org/ijetst.in/index.php/ijetst/article/view/223
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Surds, W. (2012) .Challenges of agricultural financing {online} available from:
Smyth, R.(2004). Exploring the usefulness of a conceptual framework as a research tool: A researcher’s reflections issues in education research. Cited in Jeffes, S. (2012).’What is The Meaning of Conceptual Framework in Research?’.eHow: Demand Media Inc{online} available from
http://www.ehow.com/about_6664512_meaning-conceptual-framework-research_html
Thomas, R.M (2003) ed.by Cappelo, P. Livsey, R. and Robinson, S. Blending Qualitative and Quantitative Research Methods in Theses and Dissertation.USA: Corwin Press Inco.
TAHA, (2011).The Horticultural Sector in Tanzania: Challenges and Opportunities. Arusha: Tanzania Horticultural Association.
Unesco National of The United Republic of Tanzania. (n.d), Agriculture: Green revolution to Improve productivity {online}, available from:
http://www.natcomreport.com/Tanzania/pdf-new/agriculture.pdf
United Republic of Tanzania,(2002). Agricultural Sector Development Program (ASDP), Ministry of Agriculture, Food Security and Cooperatives, Dar es Salaam
United Republic of Tanzania, (2006).The Banking and Financial Institutions Act. Dar es Salaam: Government Printing Press.
United Republic of Tanzania, (2008).Ministry of Agriculture Food Security and Cooperatives, Final Report: ‘Agriculture Sector Review and Public Expenditure Review’, (2008/2009).{online} available from
http://www.agriculture.go.tz/publications/english%20docs/Agriculture %20Sector%20R
United Republic of Tanzania, (2001). Agricultural Sector Development Strategy,{online}available from http://www.tzonline.org/pdf/agriculturalsectordevelopmentstrategy.pdf
URT, AU and NEPAD, (2012), Financing Agricultural Sector Development: Brief no. 3, Dar es Salaam: Ministry of Agriculture, Food Security and Cooperatives.
Wenner,M.D.(2010). Sustainable solution for ending hunger and poverty.18 (10), Washington, DC: International Food Policy Research Institute
Wolter, D. (2008). Tanzania – The Challenge of Moving from Subsistence to Profit, Paris: OECD Development centre.
http://businessmindsafrica.org/sites/default/files/KIFISACCOS.pdf
Bagazonzya, H. Safdar, Z. and Sen, S. (2011). Broadening Smallholders’ Access to Financial Services through ICT. New York: World Bank
Orodho ,(2003). Essentials of Education and Social Sciences Research Method. Nairobi: Masola Publishers. Cited in Kombo, D.K. and Tromp, D.L.A (2011) Proposal and Thesis Writing. Nairobi GPO (Kenya): Paulines Publication Africa.
BOT, (2011). The Horticultural Performance in Perspective. Arusha: The Case of Northern Tanzania, Department of Economics.
Calvin, M. (2011), Agricultural Value Chain Finance Strategy and Design. Rome, Italy: Food and Agriculture Organisation of the United Nations.
Campion A, Coon J, and Wenner M. (2010). Financing Agriculture Value Chains in Central America, IDB, Washington
Consultants and Trainers. (2010), Financial Services to Agriculture Value Chain Report. Kenya.
Chan, D. (2000). ‘The Development of the Airline Industry from 1978 to 1998 – A strategic Global Overview’. The Journal of Management Development, 19 (6), 489-514.
Chowdhury Erfan, (2007). Low Cost Carriers: How Are They Changing the Market Dynamics of the U.S. Airline Industry? Ontario: Department of Economics, Carleton University Ottawa.
Chu, Y.C. (1995). The Study of Departure Passengers Whose Conceptual Gaps on the Quality of Airlines Traffic Service. China: Master Thesis, Chinese Culture University.
David, N. (2008) “Finance in Value Chain Analysisâ€. Unpublished PhD Thesis, Microreport No. 132, Washington DC: US Agency for International Development.
Denzin, N.K and Lincoln, Y.S (eds) (1994),Qualitative and Quantitative Methods.London:Sage Publication. Cited in Thomas, R.M (2003) ed.by Cappelo, P. Livsey, R. and Robinson, S. Blending Qualitative and Quantitative Research Methods in Theses and Dissertation.USA: Corwin Press Inco.
Feder, G. Lau, L.J. Lin, J.Y. and Luo,X (1990). The Relationship between Credit and Productivity in Chinese Agriculture: Journal of Agriculture and Economy, 72(5)1151-1157{online},available fromhttp://www.ajae.oxfordjournals.org/content/72/5/1151.extract
George, O.and Ouma, A.S (2012), Informal Credit and Factor Productivity in Africa: Does Informal Credit Matter? Macro-Economic Division, Kenya: Central Bank.
Joppe, M. (2000). The Research Process. Canada: University of Toronto. Cited in Golafshani, N. (2003), Understanding Reliability and Validity in Qualitative Research. The Qualitative Report, 8(4) 598 {online} available from
http://peoplelearn.homestead.com/MEdHOME/QUALITATIVE/Reliab.VALIDITY.pdf
Haralambos, M. and Holborn, M. (n.d), Sociology: ‘Themes and Perspectives’. Cited in Jeffes, S.(2012). ‘What is The Meaning of Conceptual Framework in Research?’.Demand Media Inc {online} available from
http://www.ehow.com/about_6664512_meaning-conceptual-framework-research_html
International Labour Office, (1999). Safety and Health in Agriculture. International Labour Organization. pp. 77
International Financial Cooperation,(2011). Scaling Up Access to Finance for Agricultural SMEs Policy Review and Recommendations. Washington: IFC.
Investors Words, (2012), Jin, L.L. (1998). The Empirical Study on Domestic Passengers' Choice Behavior of the Airlines. Unpublished PhD thesis, National Cheng Kung University, {online} available from:
< http://www.investorwords.com/1950/financial_institution.html
Kaino D.K and Mashindano, O. (2012), The Role of Financial Sector in Agriculture Development and Industrialization, Economics and Social Research Foundation, Dar es Salaam.
Kaplinsky, Raphael, and Mike M. (2002). A Handbook for Value Chain Research.Brighton,United Kingdom: Institute of Development Studies.
Keohane, R. O. King, G. And Verba, S. (1994). Designing Social Inquiry: Scientific Inference in Qualitative Research.USA: Princeton University Press. Cited in
Thomas, R.M (2003) ed. by Cappelo, P. Livsey, R. and Robinson, S. Blending Qualitative and Quantitative Research Methods in Theses and Dissertation.USA: Corwin Press Inco.
Kombo, D. K. and Tromp, D.L.A (2011) Proposal and Thesis Writing. Nairobi GPO (Kenya): Paulines Publication Africa.
Konare, K. (2001). Challenges to agricultural financing. Unpublished thesis. Mali: Michigan State University.
Lederman, R. (1991), Content Analysis on Reliability and Validity: Journal of Maternal/ Child Nursing.6,(4){online}.available from
http://www.journals.lww.com/mcnjournal/Citation/1991/07000/Content_Analysis_Reliability_and_Validity.8.aspx
Manohar, S. and Todd, R.K (2010). Innovations in Rural and Agriculture Finance. Washington: International Food Research Institute
Shamoo, A. and Resnik, D. (2009). Responsible Conduct of Research. 2nd ed. New York: Oxford University Press.
Shirestha,P.B (2009). Research Paradigms: An Overview. Unpublished Phd Thesis, Nepal: Institute of Engineering.{Online}available from http://www.scribd.com/doc/18326060/Research-Paradigms-An-Overview.
Surds, W. (2012) .Challenges of agricultural financing {online} available from:
Smyth, R.(2004). Exploring the usefulness of a conceptual framework as a research tool: A researcher’s reflections issues in education research. Cited in Jeffes, S. (2012).’What is The Meaning of Conceptual Framework in Research?’.eHow: Demand Media Inc{online} available from
http://www.ehow.com/about_6664512_meaning-conceptual-framework-research_html
Thomas, R.M (2003) ed.by Cappelo, P. Livsey, R. and Robinson, S. Blending Qualitative and Quantitative Research Methods in Theses and Dissertation.USA: Corwin Press Inco.
TAHA, (2011).The Horticultural Sector in Tanzania: Challenges and Opportunities. Arusha: Tanzania Horticultural Association.
Unesco National of The United Republic of Tanzania. (n.d), Agriculture: Green revolution to Improve productivity {online}, available from:
http://www.natcomreport.com/Tanzania/pdf-new/agriculture.pdf
United Republic of Tanzania,(2002). Agricultural Sector Development Program (ASDP), Ministry of Agriculture, Food Security and Cooperatives, Dar es Salaam
United Republic of Tanzania, (2006).The Banking and Financial Institutions Act. Dar es Salaam: Government Printing Press.
United Republic of Tanzania, (2008).Ministry of Agriculture Food Security and Cooperatives, Final Report: ‘Agriculture Sector Review and Public Expenditure Review’, (2008/2009).{online} available from
http://www.agriculture.go.tz/publications/english%20docs/Agriculture %20Sector%20R
United Republic of Tanzania, (2001). Agricultural Sector Development Strategy,{online}available from http://www.tzonline.org/pdf/agriculturalsectordevelopmentstrategy.pdf
URT, AU and NEPAD, (2012), Financing Agricultural Sector Development: Brief no. 3, Dar es Salaam: Ministry of Agriculture, Food Security and Cooperatives.
Wenner,M.D.(2010). Sustainable solution for ending hunger and poverty.18 (10), Washington, DC: International Food Policy Research Institute
Wolter, D. (2008). Tanzania – The Challenge of Moving from Subsistence to Profit, Paris: OECD Development centre.