Abstract:
This paper sought to explore whether rural-urban migration and urban dwellers have equal access
to credit services. Data were collected from two case-study emerging urban centres in Kilolo and
Mufindi districts in Tanzania. Statistics encompassing measures of association, mean differences
and a recursive bivariate probit model were used. Findings revealed marginal difference between
the proportions of rural-urban migrants and urban dwellers with access to credit services in the
case study areas. The model identified annual income, membership to local network/associations
dealing with capital mobilisation and credit services as well as ownership of tangible assets as the
main factors leading to increased access to credit. The study recommends policy interventions that
can raise labour productivity and effectively engage young people in economic activities both in
urban and rural areas. Access to formal credit among potential borrowers can be enhanced through
dedicated support in training and sensitization to mobilize collective savings and initiate credit
services as means to improve their creditworthiness and access to loans from formal institutions.
