Contribution of Financial Institutions Towards Agriculture Sector Growth in Tanzania: A Case of Arusha Region

Minja Hosiana Ruwaichi, Samwel Marwa Werema

Abstract: The paper assesses the contribution of financial institutions toward agriculture sector growth in Tanzania. The study adopted a case study design where Arusha Region in Tanzania was used. A mixed approach was employed where both quantitative and qualitative data were collected through questionnaires and interview methods respectively. Questionnaires were administered to farmers while the interview was conducted with loans officers from the sampled financial institutions within the study area. The qualitative data gathered through interview was analyzed through Theme Content Analysis (TCA) technique while the quantitative data gathered through questionnaires were presented and analyzed. Furthermore, inferential statistics were involved to establish the relationship among the variables. The study finds that financial institutions and agriculture financing policies have a positive contribution to the growth of the agricultural sector in Tanzania. The study recommends that the government should provide financial support to those financial institutions which provide financial loans to agricultural sector. It is also recommends that banks should offer more conducive and friendly environment for farmers to secure loans. They should make sure that interest rates are affordable and collateral requirements are minimized to the manageable level so that access to finance could be widened up for farmers.

Keywords: Agricultural Sector, Financial Institutions, Credit Facilities, Interest Rates, Collaterals