Financial Access and Groundnuts Productivity: Smallholder Farmers' Perspective in Tanzania

Abstract

This study assessed the contribution of financial access to groundnut productivity of smallholder farming in Kongwa district of Tanzania. A cross-sectional research design was used, utilizing a mixed-method approach that combined quantitative and qualitative data collection techniques. A sample of 105 smallholder farmers was randomly selected from the population. Data was gathered through questionnaires and interviews, and the Cobb-Douglas production function was applied to assess the effect of finance access inclusion on groundnut productivity. Findings revealed that access to credit, improved fertilizers, increased education and training, farmers' age, and livestock ownership presented a significant positive contribution to groundnut productivity. In contrast, large household size and greater distance to the nearest market were associated with decreased groundnut productivity among smallholder farmers. The study recommends an immediate intervention from the government and private sector to educate farmers about credit utilization and encourage the adoption of best farming practices in groundnut production. Additionally, the study suggests initiatives to bring markets closer to the farmers through improved transportation infrastructures. Lastly, financial inclusion policies for smallholder farmers, such as the provision of financial literacy programs and favorable interest rates, will encourage more farmers to access loans and thus increase their livelihoods through increased production productivity. The study carries its application in the area of financial inclusion for small-scale farmers in less developed countries particularly in rural areas.