Access to Agricultural Finance in Tanzania

Abstract

The degree of access to financial among the Rural Producer Organizations and their individual members is very low in most of the developing countries, partly as a result of the underdeveloped institutional framework. According to a survey by the Bank of Tanzania (BOT) in 1997 the size of the unmet rural financial services demand is huge, especially after the introduction of the financial sector reforms and privatization. The key findings indicated that 82% of the rural households were saving informally, mostly at homes. Of those operating bank accounts, they only saved 12% of their total savings. On the other hand, about 94% of the total households were willing to borrow if there were available resources and appropriate products and methodologies (BOT, 1997). A similar survey conducted by the BOT in 2002 revealed that between 6%-8% of the total rural credit demands were met by the existing formal financial institutions (IFAD, 2002:19)