Profiling smallholder farmers’ inclusion in agricultural credit markets: evidence from Morogoro Municipality, Tanzania

This study profiles smallholder farmers’ inclusion in agricultural credit markets in Morogoro Municipality, Tanzania, within the context of the country’s expanding financial inclusion agenda. Guided by financial inclusion theory and credit rationing theory, the study used a mixed-methods approach. Primary data were collected from 300 smallholder farmers selected through multistage sampling, with quantitative data analysed descriptively and qualitative data thematically. Findings show that only 35.33% of smallholder farmers accessed formal agricultural credit, while 64.67% remained excluded. Credit participation was significantly associated with sex, marital status, education level, farm size, and farming purpose, but not with age, household size, or farming experience. Informal finance remained important, with personal savings accounting for 41% of farmers’ financing sources, followed by borrowing from friends and relatives (19.67%). Nearly all farmers (99.33%) reported inadequate farm capital. Among excluded farmers, lack of collateral or titled land (73.2%), high interest rates (66.0%), complex application procedures (60.8%), and extensive documentation requirements (56.7%) were major barriers. The study concludes that expanded financial infrastructure has not translated into broad agricultural credit inclusion. Context-responsive lending, flexible collateral arrangements, simplified procedures, and targeted farmer support are needed to strengthen productive financial inclusion among smallholder farmers.