| Agriculture is the most important productive sector in Tanzania since it accommodates approximately 74%of the country's population in the country.It plays a significant role in reducing poverty and builds a strong foundation for the national economy and prosperity of other productive sectors.Despite the immense contribution of agriculture to the Tanzanian economy,its overall productivity remains low and thus affecting negatively the livelihoods of small producers and other stakeholders involved in the value chain system.One of the factors leading to low productivity in the agricultural sector is financial constraints faced by the majority of smallholder farmers in the countryside.This situation prevails because most of the commercial banks refuse to support the agricultural sector because of its dynamics and challenges that make it to be unsustainable and weak.The establishment of Savings and Credit Cooperative Societies(SACCOS)in rural areas intends to create favorable environment for smallholder farmers who are considered to be unbankable to mobilize their resources and access financial services such as credit,insurance and remittances.Such services have been provided to smallholder farmers in the marginalized communities in order to boost agricultural production and ensure better livelihood status among the producers.Despite of their contributions in boosting agricultural production in rural Tanzania,little information is known about the impact of SACCOS' operations on farmers' household income in rural communities.This study was set out to assess the contribution of microfinance initiatives to farmers'household income in four selected Agricultural SACCOS in Mvomero and Morogoro districts in Tanzania.Specifically,the study explored the attitude of smallholder farmers towards the efficiency of SACCOs services,assessed institutional procedures applied by the Agricultural SACCOS in providing financial services to their members and examined the performance of Agricultural SACCOS in supporting agricultural productivity.Also it compared income levels between smallholder farmers with membership and their counterparts without membership and finally analyzed the value chains of the selected crops in order to identify the limitations of SACCOS' interventions in the agricultural sector.The study involved 410 respondents,where 250 were smallholder farmers with membership from the selected SACCOS namely;Matombo,Kinole,Mvomero and Mlali,160 were smallholder farmers without SACCOS' membership from the same wards.Also it involved key informants from the Ministry of Agriculture,Food Security and Cooperatives,Morogoro and Mvomero District Councils and the selected financial cooperatives.Both purposive and simple random techniques were employed for selecting the respondents based on their needs for accomplishing the scholarly work.Semi-structured questionnaire was used to gather first-hand data from the beneficiaries and non-beneficiaries of SACCOS' services while key informants' interview was employed for the technocrats and SACCOS'leaders because of their expertise on issues being researched.Semantic differential scale was used to assess the attitude of smallholder farmers towards SACCOS' operations.Also the study gathered relevant reports and documents from the respective SACCOS and Local Government Authorities and the Ministry of Agriculture,Food Security and Cooperatives.Analysis of qualitative data was done through content analysis while statistical analysis was done using SPSS software.Descriptive analysis was done through frequencies,percentages and means whereas for inferential analysis,Independent Sample T-test,Regression model of double log form and Binary logistic regression model were employed to analyze data as per the study objectives.Ethical considerations were observed in order to ensure the attainment of objective truth in this scholarly work.The study found that the majority of smallholder farmers including members and non-members of SACCOS had a positive attitude towards SACCOS' services implying that even the non-members were aware of the importance of SACCOS in boosting production in agricultural communities.The study also revealed that proper institutional procedures employed by financial cooperatives in the study area enabled SACCOS' members to access loans and thus participate smoothly in agricultural production.The findings depicted that banana,pineapple,rice and tomato growers who accessed financial services from SACCOS produced more than their counterparts without membership where the difference in productivity for each crop was almost 2.5 metric tons per acre.This situation enabled SACCOS'members to earn more income than their counterparts and thus attaining better livelihood status at the household level in terms of housing,assets' possession and access to social services.However,the study found that SACCOS' failed to participate in other essential activities such as marketing and processing because of policy barriers and inadequate managerial skills.This implies that the income earned by SACCOS' members from farm and non-farm activities is still low since SACCOS' operations in the agricultural sector are limited.Therefore,the study recommends that the government should formulate the new cooperative policy in order to ensure proper coordination of policies in the agricultural sector which accommodates the majority of people in the country.This strategy should go along with the provision of trainings on marketing,financial management,agro-processing issues so as to promote both;agricultural and industrial sectors.Furthermore,the study recommends that SACCOS should continue to improve their institutional procedures in order to ensure efficiency in the provision of financial services to their clients. |
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