Exploring Microcredit Use Patterns of Tanzanian Smallholder Farmers through Multinomial Logistic Regression

Exploring Microcredit Use Patterns of Tanzanian Smallholder Farmers through Multinomial Logistic Regression | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Exploring Microcredit Use Patterns of Tanzanian Smallholder Farmers through Multinomial Logistic Regression Lazaro Athanas Mwonge, Charles Tundui, Robert Michael Lihawa This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-7696602/v1 This work is licensed under a CC BY 4.0 License Status: Published Journal Publication published 17 Feb, 2026 Read the published version in Discover Sustainability → Version 1 posted 13 You are reading this latest preprint version Abstract Purpose This study examines microcredit utilisation patterns among smallholder farmers in Morogoro region of Tanzania. It challenges the assumption that access to microcredit enhances farm productivity by revealing diverse usage behaviours that extend beyond agricultural goals. Design/Methodology/Approach: A cross-sectional design was employed, involving 240 smallholder farmers. Descriptive analysis and multinomial logistic regression were used to investigate the diverse microcredit utilization patterns given its suitability for modelling categorical outcome variables. Findings: The results reveal that 47.1 percent of smallholder farmers utilised microcredit exclusively for agricultural purposes, whereas 28.7 percent diverted the funds to non-agricultural uses, including food, healthcare, education, and social obligations. Meanwhile, 24.2 percent used microcredit for both farm and non-farm activities. This highlights the multifunctional role of microcredit within rural livelihoods. Male farmers were more likely to use microcredit for non-farm purposes, whereas higher education levels were linked to less diversion. Household health and headship dynamics also played significant roles in influencing spending decisions. Practical Implications: The study recommends that policymakers and microfinance institutions enhance borrower training and monitoring systems to promote effective loan utilisation. Moreover, the development of customised credit products aligned with farming seasons could further strengthen productivity outcomes. Originality/Value: Unlike prior studies that focus predominantly on microcredit access, this research emphasises the behavioural patterns of microcredit usage among smallholder farmers. It offers valuable insights into the interplay between financial behaviour and agricultural performance, thereby contributing to the broader discourse on financial inclusion and rural development in Sub-Saharan Africa. Microcredit smallholder agriculture utilisation patterns credit fungibility Tanzania agricultural productivity Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Published Journal Publication published 17 Feb, 2026 Read the published version in Discover Sustainability → Version 1 posted Editorial decision: Revision requested 02 Dec, 2025 Reviews received at journal 26 Nov, 2025 Reviewers agreed at journal 17 Nov, 2025 Reviews received at journal 02 Nov, 2025 Reviewers agreed at journal 01 Nov, 2025 Reviewers agreed at journal 19 Oct, 2025 Reviews received at journal 18 Oct, 2025 Reviewers agreed at journal 01 Oct, 2025 Reviewers invited by journal 01 Oct, 2025 Editor assigned by journal 30 Sep, 2025 Editor invited by journal 30 Sep, 2025 Submission checks completed at journal 29 Sep, 2025 First submitted to journal 29 Sep, 2025 You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-7696602","acceptedTermsAndConditions":true,"allowDirectSubmit":false,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":527990323,"identity":"19ff16cc-62e9-4e42-af69-be9d5eb92e52","order_by":0,"name":"Lazaro Athanas Mwonge","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA6UlEQVRIiWNgGAWjYPACCwj1AYjZ2InTIgEmGWeAtDCTooWZB0wSUKs7I/nYwy8VEvLy7WcfPrb5tU2ej5mB8cPHHNxazG6kpRvLnJEwbOxJNzbO7btt2MbMwCw5cxseLbdzzKQl2yQYmxnS2KRze24zArWwMfMS1PJPwr6N/xmbtGXPbXuitEh+bJBI7JEA2sLw43YiYS33n6VJMxyTSJ4h8YzZsLfhdnIbM2Mzfr+cOXxM8keNje38/jTGBz/+3Lad39588MNHPFpAABIdIMDYBiYb8KsHKfkBZ/4hqHgUjIJRMApGIAAALtpK1wuO9NAAAAAASUVORK5CYII=","orcid":"","institution":"Mzumbe University","correspondingAuthor":true,"prefix":"","firstName":"Lazaro","middleName":"Athanas","lastName":"Mwonge","suffix":""},{"id":527990324,"identity":"c2b4317e-e09d-495d-a76f-0fdd6bc9e483","order_by":1,"name":"Charles Tundui","email":"","orcid":"","institution":"Mzumbe University","correspondingAuthor":false,"prefix":"","firstName":"Charles","middleName":"","lastName":"Tundui","suffix":""},{"id":527990325,"identity":"69850e1a-685b-45cd-adcb-3664e2256ac8","order_by":2,"name":"Robert Michael Lihawa","email":"","orcid":"","institution":"Mzumbe University","correspondingAuthor":false,"prefix":"","firstName":"Robert","middleName":"Michael","lastName":"Lihawa","suffix":""}],"badges":[],"createdAt":"2025-09-23 16:53:25","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-7696602/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-7696602/v1","draftVersion":[],"editorialEvents":[{"content":"https://doi.org/10.1007/s43621-026-02829-2","type":"published","date":"2026-02-17T15:59:11+00:00"}],"editorialNote":"","failedWorkflow":false,"files":[{"id":93444723,"identity":"516615fa-5815-4f15-b5ec-760672aaec60","added_by":"auto","created_at":"2025-10-14 01:11:49","extension":"docx","order_by":0,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":94204,"visible":true,"origin":"","legend":"","description":"","filename":"RevisedversionMicrocreditUtilisationPatterns.docx","url":"https://assets-eu.researchsquare.com/files/rs-7696602/v1/6915fa28d95b597c53a3ec71.docx"},{"id":93444830,"identity":"2138c014-59be-4d40-810d-4ea74de2d12f","added_by":"auto","created_at":"2025-10-14 01:19:49","extension":"json","order_by":1,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":5532,"visible":true,"origin":"","legend":"","description":"","filename":"3e0856bb0cf440419b89f10a8b9065b0.json","url":"https://assets-eu.researchsquare.com/files/rs-7696602/v1/0a489f90a3c60e9bab50c913.json"},{"id":93444737,"identity":"ff72d49b-2c95-4c12-8b06-2f1684f5131e","added_by":"auto","created_at":"2025-10-14 01:11:50","extension":"xml","order_by":2,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":159146,"visible":true,"origin":"","legend":"","description":"","filename":"3e0856bb0cf440419b89f10a8b9065b01enriched.xml","url":"https://assets-eu.researchsquare.com/files/rs-7696602/v1/2e5b487272ad5ebfca103caa.xml"},{"id":93445313,"identity":"e406885c-b3b9-497a-9388-bdc4b5afe923","added_by":"auto","created_at":"2025-10-14 01:27:49","extension":"wmf","order_by":3,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":1608,"visible":true,"origin":"","legend":"","description":"","filename":"image1.wmf","url":"https://assets-eu.researchsquare.com/files/rs-7696602/v1/26a0f3da0406acde061188dd.wmf"},{"id":93444726,"identity":"88a01981-90f9-4fef-9cf2-5a5ce9d27072","added_by":"auto","created_at":"2025-10-14 01:11:49","extension":"wmf","order_by":4,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":1608,"visible":true,"origin":"","legend":"","description":"","filename":"image2.wmf","url":"https://assets-eu.researchsquare.com/files/rs-7696602/v1/c13313cf9579def6deeae5af.wmf"},{"id":93445314,"identity":"2e9fb433-aa10-49e9-a11a-c49228ea8316","added_by":"auto","created_at":"2025-10-14 01:27:49","extension":"wmf","order_by":5,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":1124,"visible":true,"origin":"","legend":"","description":"","filename":"image3.wmf","url":"https://assets-eu.researchsquare.com/files/rs-7696602/v1/25ee388ee7bb5d947ef104e8.wmf"},{"id":93444727,"identity":"4b0afa90-e165-49df-8208-cfe883bdf6b3","added_by":"auto","created_at":"2025-10-14 01:11:49","extension":"wmf","order_by":6,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":1204,"visible":true,"origin":"","legend":"","description":"","filename":"image4.wmf","url":"https://assets-eu.researchsquare.com/files/rs-7696602/v1/fd8e8126163b7c90896053d9.wmf"},{"id":93444728,"identity":"9916e826-4c52-41b4-a850-523c41d5b59f","added_by":"auto","created_at":"2025-10-14 01:11:49","extension":"wmf","order_by":7,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":1204,"visible":true,"origin":"","legend":"","description":"","filename":"image5.wmf","url":"https://assets-eu.researchsquare.com/files/rs-7696602/v1/ed48cc9864a0cbf2fb651244.wmf"},{"id":93444831,"identity":"bbc34aad-51d8-4b26-888c-5f22269eb52c","added_by":"auto","created_at":"2025-10-14 01:19:49","extension":"wmf","order_by":8,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":1284,"visible":true,"origin":"","legend":"","description":"","filename":"image6.wmf","url":"https://assets-eu.researchsquare.com/files/rs-7696602/v1/4cc7265dfe539b2988d6a69b.wmf"},{"id":93444730,"identity":"f0173013-855b-4c81-95eb-153a0ce1cf83","added_by":"auto","created_at":"2025-10-14 01:11:49","extension":"png","order_by":9,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":2888,"visible":true,"origin":"","legend":"","description":"","filename":"Onlineimage1.png","url":"https://assets-eu.researchsquare.com/files/rs-7696602/v1/ad63f003e3fab74340620d6d.png"},{"id":93445315,"identity":"597bc41a-4f05-4b58-8c38-97ddb14e236e","added_by":"auto","created_at":"2025-10-14 01:27:49","extension":"png","order_by":10,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":2942,"visible":true,"origin":"","legend":"","description":"","filename":"Onlineimage2.png","url":"https://assets-eu.researchsquare.com/files/rs-7696602/v1/c2a738bc034639c3884a0191.png"},{"id":93444735,"identity":"546bdb1b-b494-4402-b291-08fbd44954be","added_by":"auto","created_at":"2025-10-14 01:11:49","extension":"png","order_by":11,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":1144,"visible":true,"origin":"","legend":"","description":"","filename":"Onlineimage3.png","url":"https://assets-eu.researchsquare.com/files/rs-7696602/v1/6c81758c8422ca7251831417.png"},{"id":93444833,"identity":"c417eaec-bffd-4476-9032-d99cbef79f54","added_by":"auto","created_at":"2025-10-14 01:19:49","extension":"png","order_by":12,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":1246,"visible":true,"origin":"","legend":"","description":"","filename":"Onlineimage4.png","url":"https://assets-eu.researchsquare.com/files/rs-7696602/v1/a16a78f0cbbfd305b878721d.png"},{"id":93445316,"identity":"151c1f5e-8940-409d-94ee-7e1eae1d7b21","added_by":"auto","created_at":"2025-10-14 01:27:49","extension":"png","order_by":13,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":1304,"visible":true,"origin":"","legend":"","description":"","filename":"Onlineimage5.png","url":"https://assets-eu.researchsquare.com/files/rs-7696602/v1/5193df1edd2d22bc3671f87d.png"},{"id":93444733,"identity":"629b6ea4-b379-4660-a1d1-09629862a48b","added_by":"auto","created_at":"2025-10-14 01:11:49","extension":"png","order_by":14,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":1484,"visible":true,"origin":"","legend":"","description":"","filename":"Onlineimage6.png","url":"https://assets-eu.researchsquare.com/files/rs-7696602/v1/91f2c3e1e0a06c608bfa49ab.png"},{"id":93444738,"identity":"65c04d37-dfed-4cd5-af8f-b786139f57fe","added_by":"auto","created_at":"2025-10-14 01:11:50","extension":"xml","order_by":15,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":156753,"visible":true,"origin":"","legend":"","description":"","filename":"3e0856bb0cf440419b89f10a8b9065b01structuring.xml","url":"https://assets-eu.researchsquare.com/files/rs-7696602/v1/c619857620bb91a6c69cf8fe.xml"},{"id":93444739,"identity":"3600b520-0c53-4eed-9503-2d5636a93513","added_by":"auto","created_at":"2025-10-14 01:11:50","extension":"html","order_by":16,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":170933,"visible":true,"origin":"","legend":"","description":"","filename":"earlyproof.html","url":"https://assets-eu.researchsquare.com/files/rs-7696602/v1/20f43b313c550e3dcca8df84.html"},{"id":103251942,"identity":"b95ee45b-109f-4f20-b6f5-6b5034975be2","added_by":"auto","created_at":"2026-02-23 16:12:17","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":515382,"visible":true,"origin":"","legend":"","description":"","filename":"RevisedversionMicrocreditUtilisationPatterns.pdf","url":"https://assets-eu.researchsquare.com/files/rs-7696602/v1_covered_b3acba3c-62a6-4544-94c9-8d636d6e8f90.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"Exploring Microcredit Use Patterns of Tanzanian Smallholder Farmers through Multinomial Logistic Regression","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":false,"highlight":"","institution":"","isAcceptedByJournal":true,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"discover-sustainability","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":false,"externalIdentity":"disu","sideBox":"Learn more about [Discover Sustainability](https://www.springer.com/43621)","snPcode":"","submissionUrl":"","title":"Discover Sustainability","twitterHandle":"","acdcEnabled":true,"dfaEnabled":true,"editorialSystem":"stoa","reportingPortfolio":"Discover Series","inReviewEnabled":true,"inReviewRevisionsEnabled":true},"keywords":"Microcredit, smallholder agriculture, utilisation patterns, credit fungibility, Tanzania, agricultural productivity","lastPublishedDoi":"10.21203/rs.3.rs-7696602/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-7696602/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003ch2\u003ePurpose\u003c/h2\u003e\u003cp\u003eThis study examines microcredit utilisation patterns among smallholder farmers in Morogoro region of Tanzania. It challenges the assumption that access to microcredit enhances farm productivity by revealing diverse usage behaviours that extend beyond agricultural goals.\u003c/p\u003e\u003ch2\u003eDesign/Methodology/Approach:\u003c/h2\u003e\u003cp\u003eA cross-sectional design was employed, involving 240 smallholder farmers. Descriptive analysis and multinomial logistic regression were used to investigate the diverse microcredit utilization patterns given its suitability for modelling categorical outcome variables.\u003c/p\u003e\u003ch2\u003eFindings:\u003c/h2\u003e\u003cp\u003eThe results reveal that 47.1 percent of smallholder farmers utilised microcredit exclusively for agricultural purposes, whereas 28.7 percent diverted the funds to non-agricultural uses, including food, healthcare, education, and social obligations. Meanwhile, 24.2 percent used microcredit for both farm and non-farm activities. This highlights the multifunctional role of microcredit within rural livelihoods. Male farmers were more likely to use microcredit for non-farm purposes, whereas higher education levels were linked to less diversion. Household health and headship dynamics also played significant roles in influencing spending decisions.\u003c/p\u003e\u003ch2\u003ePractical Implications:\u003c/h2\u003e\u003cp\u003eThe study recommends that policymakers and microfinance institutions enhance borrower training and monitoring systems to promote effective loan utilisation. Moreover, the development of customised credit products aligned with farming seasons could further strengthen productivity outcomes.\u003c/p\u003e\u003ch2\u003eOriginality/Value:\u003c/h2\u003e\u003cp\u003eUnlike prior studies that focus predominantly on microcredit access, this research emphasises the behavioural patterns of microcredit usage among smallholder farmers. It offers valuable insights into the interplay between financial behaviour and agricultural performance, thereby contributing to the broader discourse on financial inclusion and rural development in Sub-Saharan Africa.\u003c/p\u003e","manuscriptTitle":"Exploring Microcredit Use Patterns of Tanzanian Smallholder Farmers through Multinomial Logistic Regression","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2025-10-14 01:11:44","doi":"10.21203/rs.3.rs-7696602/v1","editorialEvents":[{"type":"communityComments","content":0},{"type":"decision","content":"Revision requested","date":"2025-12-02T13:29:01+00:00","index":"","fulltext":""},{"type":"editorInvitedReview","content":"","date":"2025-11-26T16:57:33+00:00","index":"hide","fulltext":""},{"type":"reviewerAgreed","content":"331475823981016721865545038300882168574","date":"2025-11-17T11:18:11+00:00","index":"hide","fulltext":""},{"type":"editorInvitedReview","content":"","date":"2025-11-02T10:44:14+00:00","index":"hide","fulltext":""},{"type":"reviewerAgreed","content":"194458770913794046460436848305828469495","date":"2025-11-01T04:53:08+00:00","index":"hide","fulltext":""},{"type":"reviewerAgreed","content":"183463918135691195083932827726665967358","date":"2025-10-19T12:12:18+00:00","index":"hide","fulltext":""},{"type":"editorInvitedReview","content":"","date":"2025-10-18T21:04:32+00:00","index":"hide","fulltext":""},{"type":"reviewerAgreed","content":"232325801950085974562974834890667100697","date":"2025-10-01T15:07:57+00:00","index":"hide","fulltext":""},{"type":"reviewersInvited","content":"","date":"2025-10-01T07:09:39+00:00","index":"","fulltext":""},{"type":"editorAssigned","content":"","date":"2025-09-30T10:46:02+00:00","index":"","fulltext":""},{"type":"editorInvited","content":"","date":"2025-09-30T10:12:22+00:00","index":"","fulltext":""},{"type":"checksComplete","content":"","date":"2025-09-29T19:31:01+00:00","index":"","fulltext":""},{"type":"submitted","content":"Discover Sustainability","date":"2025-09-29T19:27:22+00:00","index":"","fulltext":""}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"discover-sustainability","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":false,"externalIdentity":"disu","sideBox":"Learn more about [Discover Sustainability](https://www.springer.com/43621)","snPcode":"","submissionUrl":"","title":"Discover Sustainability","twitterHandle":"","acdcEnabled":true,"dfaEnabled":true,"editorialSystem":"stoa","reportingPortfolio":"Discover Series","inReviewEnabled":true,"inReviewRevisionsEnabled":true}}],"origin":"","ownerIdentity":"465965fd-a7d3-40f4-b23f-eb9a9b66f7f2","owner":[],"postedDate":"October 14th, 2025","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"published-in-journal","subjectAreas":[],"tags":[],"updatedAt":"2026-02-23T16:09:02+00:00","versionOfRecord":{"articleIdentity":"rs-7696602","link":"https://doi.org/10.1007/s43621-026-02829-2","journal":{"identity":"discover-sustainability","isVorOnly":false,"title":"Discover Sustainability"},"publishedOn":"2026-02-17 15:59:11","publishedOnDateReadable":"February 17th, 2026"},"versionCreatedAt":"2025-10-14 01:11:44","video":"","vorDoi":"10.1007/s43621-026-02829-2","vorDoiUrl":"https://doi.org/10.1007/s43621-026-02829-2","workflowStages":[]},"version":"v1","identity":"rs-7696602","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-7696602","identity":"rs-7696602","version":["v1"]},"buildId":"8U1c8b4HqxoKbykW_rLl7","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}