Financing agricultural marketing in Tanzania: a case study of small scale millers in Dar es Salaam and Morogoro regions
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Date
2007
Authors
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Journal ISSN
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Publisher
Sokoine University of Agriculture
Abstract
The purpose of this study was to identify the sources of finance available to small scale
maize and paddy millers in Dar es Salaam and Morogoro regions. Specifically the study
aimed at identifying different sources of finance to small scale millers and describing the
mode of financial arrangements, analyze the main factors that influence small scale millers
access to credit and compare their performance. Structured questionnaire was used to
collect information from the sampled millers. Checklist was used to obtain information
from financial institutions. Major tools for analysis were descriptive statistics including
means, standard deviations and cross tabulations. Logistic and linear regressions were
used to determine factors that influence small scale millers access to formal loans and size
of loan respectively. Descriptive results show both formal and informal credit to be used in
the study area. However formal loans were found to be more used by maize millers than
paddy millers. These results provide an indication of the difficulty in accessing formal
sources of credit, forcing enterprises to rely more on their savings and informal sources.
Quantitative results indicate education and experience in business to influence access to
credit at P<0.05. The gross margin analysis of the milling operation was positive for both
maize and paddy millers. Furthermore the gross margin between millers with access to
formal credit and without access was significant different at P<0.05 for maize millers.
However for paddy millers the test was insignificant. The study recommends that there is a
need for policy measures to increase access of SMEs to formal credits. This can be
achieved through the establishment of credit insurance schemes protecting the financial
institutions against default risks, which could result in credit rationing. Similarly it was
observed that very few entrepreneurs joined SACCOs. It is recommended that there is still
a need for more sensitization to join and form SACCOs.
Description
Keywords
Agricultural marketing, Marketing, Small scale miller, Dar es Salaam region, Morogoro region
Citation
Moshi,A.B(2007)Financing Agricultural Marketing In Tanzania: Acase Study Ofsmall Scale Millers In Dar Es Salaam And Morogoro Regions.Morogoro;Sokoine University of Agreiculture.