Credit access impacts productivity among Tanzanian youth agripreneurs
Horticulture, an aspect of agriculture practiced by millions of youths across Africa, has helped improve the livelihoods of a vast majority living in poverty and struggling to find employment. The continent hosts the world’s youngest population of around 200 million youths aged 15–24 years, with many of them in rural areas engaging in farming activities as a key source of livelihood.
Stakeholders have listed agriculture as a major tool for economic growth and food security, serving as an approach to addressing Africa’s youth unemployment crisis. Although opportunities abound in the sector, they are still unrecognized and inaccessible to most young people. For instance, the high demand for agricultural products creates good opportunities, yet access to capital and credit for smallholders has been an existing problem, especially for young people.
In Tanzania, agriculture has strong ties to the country’s economic growth and food security, as it employs almost 80% of the population. Still, low productivity characterizes the sector because of constraints. According to Huldah Too, an IITA–CARE young researcher, youth farmers experience inhibitions such as lack of inputs, limited access to credit services, inadequate knowledge, and low infrastructural development.
Research studying the perception small-scale youth tomato farmers have about credit and identifying the determinants of credit access among them discovered that men are more likely to access credit than women.
After analyzing the effect of credit access on tomato productivity among these youth farmers, Too revealed that the age, educational level, and sex of the farmer were significant factors determining farmers’ access to credit in the Mvomero District of Tanzania, where she carried out the study. Other principal determinants were land size, farmer group membership, distance to the lending institution, and annual income.
According to the IFAD-sponsored study, being educated and belonging to a farmers’ group increases the likelihood of a farmer’s access to credit. At the same time, the farther the location of lending institutions, the less probable the farmers were to access loans.
Too concludes that governments and non-governmental organizations should promote education and literacy among farmers and farmer groups to give rural farmers greater access to credit. Financial institutions in Tanzania can consider reaching out to youth farmers living in rural areas to increase their awareness of lending services, borrowing procedures, and requirements. On the other hand, the government can explore avenues to invest in education to boost literacy levels and limit obstacles to credit access.
The IITA-CARE project is focused on increasing the availability and use of evidence for youth policies and decision-making related to youth participation in the rural sector. The grantees are working in 10 countries across Africa to ensure youths are encouraged to adopt agribusiness and rural economy is improved.