Role of Finance Access on Groundnut Productivity among Smallholder Farmers at Kongwa District in Dodoma Region, Tanzania.

Abstract

This study examined the impact of finance access on groundnut productivity within the context of smallholder farming in Kongwa district, Dodoma region. To achieve this, a cross- sectional research design was employed, utilizing a mixed-method approach that combined quantitative and qualitative data collection techniques. A sample of 105 smallholder farmers involved in groundnut production was randomly selected from the population. Data was gathered through questionnaires and interviews, and the Ordinary Least Square regression model was applied to scrutinize the effect of finance access on groundnut productivity. The study findings unveiled significant factors influencing groundnut productivity in Kongwa district. Notably, access to credit, the utilization of fertilizers, an increase in years of education and training, farmer's age, and livestock ownership were all identified as key contributors to enhanced groundnut farm productivity. In contrast, an increase in household size and greater distance to the nearest market were associated with decreased groundnut productivity, thereby hindering market commercialization. As groundnut farming significantly contributes to the livelihoods and economic well-being of many farmers in the district, the study puts forth a set of recommendations. It calls for immediate action by the government and the private sector to educate farmers about credit utilization and encourage the adoption of innovative groundnut production methodologies. Additionally, the study suggests initiatives to bring markets closer to the farmers, fostering the commercialization of groundnut farming and, consequently, an increase in productivity. On policy grounds, it is recommended to enhance financial inclusion policies for smallholder farmers, such as the provision of financial literacy programs and the reduction of interest rates to alleviate fears of asset loss. This should also go alongside promoting sustainable farming practices.