Does Finance Matters in Climate Change Adaptation? Understanding Factors Affecting Smallholder Farmers Access and Use of Informal Credits for Climate Change Adaptation in Semi-arid Mountainous Areas of Hanang District, Tanzania.

This paper examines smallholder farmers‘ access to and use of informal credits for climate change adaptation in Hanang District, Tanzania. The paper used bivariate probit model to analyze data. The results reveal that about 75% of respondents indicated to have access to informal credit, with 68.3% actively employing credit in agriculture for climate change adaptation. The bivariate probit regression analysis shows that having good relationships with other farmers and neighbors or relatives, along with a lower perception of risk, are the most important factors that affect access and use of informal credit for climate change adaptation. Building relationships and connections among farmers through organized networking events, the implementation of risk mitigation strategies, and the promotion of financial literacy initiatives to bolster the capacities of smallholder farmers in the credit market are important factors that should be considered by policymakers and other stakeholders to enhance their adaptive capacity in the changing climate.