A qualitative inquiry on the role of microfinance on smallholder farmers’ sustainability in rural Zimbabwe

Abstract

Smallholder farmers are generally excluded from formal financial systems and tend to have limited financial intermediation options. Furthermore, from banks' perspectives, smallholder farmers’ lack of collateral makes them risky customers in that they are viewed as not being able to repay loans. Against this background, many smallholder farmers are resorting to microfinance to secure capital. This, therefore, raises the question as to whether microfinance is a panacea to smallholder farmers’ access to capital woes. In the extant literature there are mixed results in terms of explaining the role of microfinance in terms of stimulating the growth and sustainability of the smallholder farming sector. This naturally constitute the research gap that this thesis sought to address.