Influence of education level on agricultural credit access among smallholder farmers in Morogoro Municipality, Tanzania

This study examines the influence of education levels on agricultural credit accessibility among smallholder farmers in Morogoro Municipality, Tanzania, within the framework of human capital theory. The study used cross-sectional data collected from 322 smallholder farmers, of which 300 questionnaires (93.2%) were valid and suitable for analysis. The study employs a multinomial logistic regression model to examine how different education levels influence three credit outcomes: no demand and no access to credit, demand without access, and demand with successful access. The findings revealed that the relationship between education and agricultural credit accessibility is non-linear and institution-dependent. Contrary to conventional expectations, smallholder farmers with no formal education are significantly more likely to demand and successfully access agricultural credit while certificate-level education significantly reduces the likelihood of successful credit demand. In contrast, primary, secondary, diploma, and university education do not exert statistically significant effects on credit accessibility. These results partially support human capital theory while highlighting its limitations in explaining credit outcomes in imperfect rural financial markets. The study demonstrates that the economic returns to education in agricultural finance depend not only on the level of schooling but also on its relevance to institutional and procedural requirements. From a policy perspective, the study recommends complementing investments in formal education with targeted financial literacy programmes, vocational training, and inclusive agricultural credit systems that recognise diverse forms of human capital. Strengthening community-based financial institutions while aligning education policy with rural finance dynamics is essential for improving agricultural credit accessibility and advancing sustainable agricultural development.