Challenges of micro financing in agriculture: the case of Tanzania investment bank limited (TIB) as the development finance institution in Tanzania

The main objective of the study was to find out the challenges of micro financing in agriculture with a focus TIB as the DFI in Tanzania. In 2010 the government decided to set up an Agricultural Window to cater for agriculture financing needs at TIB while the on-going preparation of setting up new a DFI dedicated to financing agriculture, the Tanzania Agricultural Development Bank (TADB) was continuing. The research method involved the use of questionnaires and documentary review as a means of collecting data from different levels of bank employees of TIB and their clients who have benefited from the agriculture window directly and indirectly. The questionnaires were semi-structured designed so as to allow for individual opinions on the problem under study and the way forward towards finding the solutions. Documentary review was done through reports, journals and publication on agricultural and rural financing market in Tanzania and around the world in order to study the agriculture industry in general. The results were generated by SPSS package through which findings were deduced and the research questions were attested. It was found out that the challenges faced in micro financing the agriculture sector was divided into two main categories; namely the internal and external challenges surrounding TIB. A way forward was given in a form of recommendation to the government, TIB and other stakeholders to as to provide favorable environment for financing the agriculture sector by reaching out the small scale farmers in Tanzania.