Financial Inclusion and Agricultural Commercialization of Smallholder Rice Growers in Kilombero District: The Moderating effect of Institutional Support.
This survey study was conducted in Tanzania to assess the effect of financial inclusion on agriculture commercialization of smallholder rice growers in Kilombero district under the moderating effect of institutional support. Primary data were collected using structure questionnaires from ten villages in five wards of Kilombero district. Data were analyzed using multiple regression techniques with the help of IBM SPSS and Hayes PROCESS macro, while confirmatory factor analysis was done with the help of IBM Amos software. The results obtained suggest that financial services access and usage had a positive effect on commercialization while financial literacy had an insignificant positive effect. The result of the study also indicates that source of income (if agriculture) and farming experience had positive effect on commercialization while age had a negative effect. In case of moderating effect of institutional support, institutional law and regulation and institutional cultural cognitive show negative moderating effect on the relationship between financial inclusion and agriculture commercialization. So theoretical the study has proved that institutional theory construct affects the relationship between financial inclusion and agriculture commercialization. The study recommends that to improve the level of commercialization, policymakers and government are required to set policies which reduce the cost of accessing financial services such as high interest, bank fees, and collateral requirement. In addition, financial service providers required to provide programs and activities intend to improve financial literacy and improve efficiency of rules and regulations governing financial services access and usage.
Keywords: Financial inclusion, agriculture commercialization, institutional support, financial access, financial usage and financial literac
