Agricultural Credit as an Instrument of Rural Development in Tanzania: A Case Study on the Credit Programme for Tractorization of Small Scale Agriculture in Morogoro Region

Abstract

As in most developing countries, in Tanzania, agricultural credit is considered an important factor in stimulating agricultural production, particularly among small farmers. This paper provides the findings from a study on a formal agricultural credit programme sponsored by the government in Morogoro Region. The credit programme supplied tractors to small farmers in the region to improve production. Through a field survey conducted among small farmers who received the credit, it was found that the performance of the credit programme was below the expected level because of insufficient examination of the socioeconomic situation of the farms and lack of provision of supportive service to the programme.