Impact of microfinance institutions on poverty reduction among smallholder farmers: case of selected SACCOS in Dodoma urban and Kongwa district
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Date
2007
Authors
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Publisher
Sokoine University of Agriculture
Abstract
The study was conducted in Dodoma Rural and Kongwa districts both from Dodoma
region in 2007 and the number of respondents was 160. This study aimed at examining the
impact of micro finance institutions on poverty reduction among smallholder farmers. The
paper focused on SACCOS’ beneficiaries to know whether the credit provided have helped
them to move out of poverty and the extent to which that has been done. This is because
many have hailed microfinance as an effective means of assisting the” poor people”
especially farmers by providing them with credit facilities to start economic enterprises as
well as improving their livelihoods. However, there are many concerns related to the role
of micro finance institutions (MFIs) in poverty reduction. The findings in this study
revealed that the micro credits have impacted the activities and lives of beneficiaries in
several positive ways as follows; owning valuable assets, household expenditure on basic
needs, incomes from farm and off-farm activities, and house ownership, toilets and
utilities. The most prominent problems faced by many smallholder farmers in Tanzania to
join SACCOS in the study areas were mentioned as low income of household, lack of
knowledge, being tied to other financial institutions and constitutional problems. In this
study it is argued that the government ought to set favourable environment through
subsidising the SACCOS, and educating the community on financial and operations
guidelines of SACCOS.
The study concluded that SACCOS play a significant role in improving the conditions of
smallholder farmers. This in because they not only help the smallholder farmers accessing
financial services and invest in income generating activities but also they enable such
individuals to solve fundamental problems in their families. Furthermore, the study
recommends that SACCOS need to provide a range of services that cater for needs
borrowers who want to serve.
Description
Keywords
Micro finance institutions, SACCOS’ beneficiaries, Poverty reduction, Smallholder farmers, Dodoma rural, Kongwa district
Citation
Brown,A. (2007). Impact of microfinance institutions on poverty reduction among smallholder farmers: case of selected saccos in Dodoma urban and Kongwa districts .Morogoro:Sokoine University of Agriculture.