304 Int. J. Business Innovation and Research, Vol. 19, No. 3, 2019 Copyright © 2019 Inderscience Enterprises Ltd. Smallholder farmers’ intention to adopt microfinance services in rural areas of Tanzania – a behavioural study Julius J. Macha*, Yee-Lee Chong and I-Chi Chen Faculty of Business and Finance, Universiti Tunku Abdul Rahman (UTAR), Jalan Universiti, Bandar Barat, 31900, Kampar, Perak, Malaysia Email: koroma85@yahoo.com Email: chongyl@utar.edu.my Email: chenic@utar.edu.my *Corresponding author Abstract: In Tanzania, microfinance services aim to assist individuals who are not qualified for conventional banking services to access financial services that are necessary for increasing their work productivity and output. However, response given by smallholder farmers who are the majority of rural population is not encouraging. This study addresses issues that are related to behavioural variables. The probability sampling technique was used to select respondents and the questionnaire survey data were analysed by using structural equation modelling (SEM). The results show that, the following variables perceived benefits, subjective norms, attitude, and perceived behavioural control produce significant positive effects on smallholder farmer’s intention to adopt microfinance services. Meanwhile, perceived barriers and behavioural intention have significant negative relationship. The public and private sectors are recommended to arrange more training sessions to enhance respondents’ financial knowledge, revise group-lending model to minimise the risk that need to be borne by individual group member, reduce the micro-loan’s interest rate, and introduce financial products that can match with rural farmers’ needs. Keywords: perceived barriers; perceived benefits; subjective norms; attitude towards microfinance; perceived behavioural control; behavioural intention. Reference to this paper should be made as follows: Macha, J.J., Chong, Y-L. and Chen, I-C. (2019) ‘Smallholder farmers’ intention to adopt microfinance services in rural areas of Tanzania – a behavioural study’, Int. J. Business Innovation and Research, Vol. 19, No. 3, pp.304–323. Biographical notes: Julius J. Macha is currently pursuing his PhD in Microfinance (Behavioural Study) from the University Tunku Abdul Rahman (UTAR), Malaysia. He is a graduate of Bachelor in Commerce from the University of Dar es Salaam and holds a Master’s of Science in Finance from the University of Strathclyde, Glassgow, UK. He is an Assistant Lecturer from the Institute of Finance Management (IFM) in banking and finance courses, researcher and consultant in banking and microfinance. He is also a Certified Professional Banker offered by Tanzania Institute of Bankers and Microfinance Training of Trainers (MFTOT) – Tokyo Development Learning Centre.