Effects of Financial Inclusion on Socio-Economics Transformation: A Case of Mbarali-Mbeya, Tanzania

Abstract

The study analyzes the effects of financial inclusion on socio-economic transformation. The study being conducted in Mbarali-Mbeya the target group was all participants in supply chain system over rice farming. More over a study used a correlation research design and a multistage sampling technique to obtain 210 unit of inquiry. The questionnaires were data collection method in which the collected, edited and screened data was analyzed inferentially by applying F-test, multiple regression, logit analysis and multiple correlation. From this analysis the results were as follows:-accessibility; adequacy; affordability; safety and sustainability of financial services and products indicated the constructs to fit the model. It was also found that financial institutions’ management innovation; presence of facilitating and innovative financial infrastructures; financial literacy; and formal operating mechanism showed the extent to which all four variables positively and significantly lead into financial inclusion. It was further revealed that surplus agricultural outputs, quality produce, increase in sales revenue, per capita income, and being accessed to quality social services were positive and significant determinants of socio-economic transformation. From these discrepancies then this study recommends that to be attained to sustained socio-economic transformation then financial users are to be effectively financial included. To be attained to financial inclusion, universal accessibility to adequacy, affordable and quality financial products are to be realized. Furthermore the study recommends that financial institutions’ management innovation, financial infrastructures, financial literacy and formalization of the businesses are to be sustained towards achieving financial inclusion necessary for sustaining socio-economic transformation.