How Savings-led Microfinance has Improved Chickpea Marketing in the Lake Zone of Tanzania

This paper examines how savings-led microfinance helped smallholder producers in Tanzania overcome marketing challenges. It presents findings from a field study conducted in June 2009.

Organizing farmers into groups allows them to produce sufficient volumes for interested buyers. Chickpea is an important cash crop for small farmers in the Lake Zone of Tanzania. Catholic Relief Services partnered with Mwanza Rural Housing Project and local farmers between 2000 and 2008 to increase chickpea production and improve marketing. The paper states that:

• Farmers found it difficult to sell collectively between 2000-2006 due to lack of cohesion among groups;
• Savings and Internal Lending Communities (SILC) model was introduced to farmers in 2006;
• SILC enabled farmers to access loans from group’s internal savings to meet immediate needs during harvest;
• Members realized that they could work more effectively by forming the SILC Group Association (SIGA);
• SIGA aimed to bring together SILC groups to achieve chickpea volumes necessary to market collectively at higher prices;
• Challenges with the SIGA model include limited marketing skills, weak fund management, complex governance and lack of transparency. Despite challenges, SIGA expanded its collective marketing efforts to include green gram by 2009.