Title:
EFFECT OF FORMAL FINANCIAL INSTITUTIONS CREDIT TO MAIZE PRODUCTOVITY IN SUMBAWANGA RURAL AND MBOZI DISTRICTS IN TANZANIA

Authors:
Dionis Joseph Ndolage; Gwahula Raphae and Saganga Kapaya, Tanzania

Abstract:
This study aimed at examining the effect of formal financial institutions credit to maize productivity of rural smallholder farmers in Sumbawanga rural and Mbozi districts in Tanzania. The study was guided by the theory of financial intermediation and neoclassical economic growth theory. The research design was descriptive quantitative in nature where balanced panel data for the year 2018 to 2020 was used. Random effect model was used to analyses 321 sample observations of the collected secondary data which involved 107 individuals. The results indicated that formal financial institutions credit has significant and positive effect to maize productivity in rural areas. It was also revealed that formal financial institutions credit has significant and positive association with maize productivity in rural area in Tanzania. The study concludes that formal financial institutions credits are predictor of maize productivity to rural smallholder farmers in Tanzania. Thus, it is recommended that policy makers (government) should set policies that encourage the increase of financial access points, reduced transaction costs and enrolling agricultural trustworthy agents in rural areas