TIB secures 30bn/- to finance SMEs

DAR ES SALAAM: TIB Development Bank has secured a 30bn/- soft loan to finance Small and Medium Enterprises (SMEs) at affordable interest rates, with repayment periods of up to 15 years.

TIB, largest development finance institution (DFI) in the country, has obtained the soft loan from the East African Development Bank (EADB) to support SMEs with financing starting at 200m/-.

TIB’s Planning and Business Development Acting Director Mr Joseph Chilambo said yesterday during the signing ceremony that the ultimate goal is to address shortage of capitals for SMEs which hinder their growth.

“We believe that providing SMEs with substantial seed capital will enable them to execute their innovative projects more effectively than giving them small amounts,” Mr Chilambo said.

The lending will be issued to registered SMEs venturing in crucial sectors especially extractive, agri-processing, manufacturing, energy, tourism, education, health and ICT. The repayment period spans from five to 15 years.

“The ultimate goal is to see more informal businesses across the country transition into the formal sector,” Mr Chilambo said.

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Earlier, TIB Development Bank’s Acting Managing Director, Ms Lilian Mbassy said ten years ago secured a 20 million US dollars (53bn/-) loan which were used to finance the establishment of a coffee factory in Kagera and cotton ginnery in Mwanza.

EADB’S Acting Director General, Mr Benard Mono, said the regional bank’s target is to ensure all East African Community’s (EAC) partner states benefit with its financing programmes.

“We want to see impact,” he said.

Meanwhile, EADB’s Chairman Dr Charlse Mwamwaja who doubles as the Tanzania’s Commissioner for Financial Sector Development of the Ministry of Finance welcomed the private sector to tap the financing opportunities from the EADB.

The private sector should regard EADB as their partner in accessing financial resources,” Mr Mwamwaja said.

TIB, which was established by an Act of Parliament in 1970, is mandated to provide medium and long-term financing to investors in key sectors such as commercial agriculture, manufacturing, processing, construction, transport, tourism and mining.

The East African Development Bank (EADB) was established in 1967 under the treaty of the former East African Cooperation, with a mandate to provide financial and related assistance to enterprises in member states that contribute to the region’s socio-economic development. Following the collapse of the original bloc, the bank was re-established under a new Charter in 1980