Influence of Financial Literacy among Sunflower Farmers on Enabling Access to Credit Facilities in Singida Municipality Tanzania

Abstract

Access to agricultural credit facilities plays a significant role in improving productivity and supporting rural livelihoods among smallholder farmers in Tanzania. Sunflower farmers in Singida Municipal Council continue to experience various challenges in accessing formal credit facilities from financial institutions despite the growing importance of sunflower farming in the area. This study examined the challenges facing sunflower farmers in accessing credit facilities from financial institutions in Singida Municipal Council. The study targeted a sample size of 230 respondents sampled by purposive and multi-stage methods. Out of these, 218 sunflower farmers completed structured questionnaires for quantitative analysis, while 10 key informants, including financial institution officials and agricultural extension officers, participated in semi-structured interviews to provide qualitative insights. Quantitative data were analyzed using descriptive statistics and multiple linear regression analysis, while qualitative data were analyzed using thematic content analysis. The findings revealed that financial literacy had a positive and statistically significant influence on access to credit facilities (β = 0.381, p = 0.000 < 0.05), implying that farmers with better understanding of loan terms, financial products, and record-keeping practices were more likely to secure agricultural loans. The study concludes that access to credit facilities among sunflower farmers in Singida Municipal Council is significantly influenced by financial literacy among other factors adopted by financial institutions. Improving financial literacy programs, is essential for enhancing financial inclusion and agricultural productivity among sunflower farmers. The study recommends that financial institutions and policymakers strengthen farmer-focused financial education to improve access to agricultural credit facilities in Tanzania.