The moderation effect of financial inclusion on the relationship between temperature variability and poverty in Tanzania

Applying ML models on the national panel surveys comprising 10,832 households in 3,644 wards, and related climate change data, this paper examined the moderation effect of credit access on the relationship between temperature variation and poverty to confirm the widely acknowledged importance of financial inclusion in facilitating adaptation to climate change.

Findings revealed that credit access reduced the importance of temperature variation in affecting poverty, pushed 3% of wards from either extreme-poor or intermediate-poor to non-poor; negatively affected wards decreased from 50.8% to 24.5% for extremely-poor, from 65.3% to 26.2% for intermediate-poor, and 56.5 to 48.5% for non-poor wards an indicative of changing direction of relationship from negative to positive, hence confirming possible use credits to adapt to temperature variation.

Available at: https://doi.org/10.55158/DEEPCFWP7