AfDB approves US$10m trade finance facility to boost Tanzanian SMEs

DAR ES SALAAM: The African Development Bank (AfDB) has approved a 10 million US dollars trade finance guarantee facility for Exim Bank Tanzania to help small and medium-sized enterprises (SMEs) gain easier access to regional and global markets, the Bank said on Monday.

The facility, championed by AfDB’s Country Manager for Tanzania, Dr. Patricia Laverley, aims to reduce barriers faced by local businesses seeking trade finance, a long-standing obstacle for Tanzania’s private sector.

SMEs account for more than 90 percent of Tanzania’s businesses and contribute about one-third of the country’s gross domestic product. AfDB said the new facility will provide up to 100 percent guarantees to international confirming banks against non-payment risks, enabling Exim Bank to extend trade lines for essential imports such as fertilizers, pharmaceuticals and agricultural equipment.

“The intervention will help ease reliance on foreign exchange collateral and free up capital for lending to productive sectors,” Laverley said in a statement. “It will also enhance Tanzania’s ability to import key goods and export commodities like coffee, cashew and cotton, while creating more jobs through SME expansion.”

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Over the next three years, the facility is expected to support about 60 million US dollars in trade transactions across key sectors, including agriculture, health, energy and manufacturing, AfDB said.

Tanzania continues to face a widening trade finance gap, with limited access to affordable credit constraining private-sector competitiveness. The Bank said the partnership with Exim Bank aligns with its regional integration and industrialization priorities, as well as Tanzania’s Vision 2025, which targets inclusive and sustainable economic growth.

AfDB added that the facility would strengthen the resilience of the country’s financial sector and support businesses involved in intra-African and international trade under the African Continental Free Trade Area (AfCFTA).

“This initiative marks a key step in building a more competitive private sector capable of driving industrial transformation and sustainable growth,” Laverley said.

The African Development Bank Group is Africa’s premier development finance institution, with 81 member countries, including 54 in Africa. Exim Bank Tanzania is one of the country’s leading commercial banks, providing trade and corporate financing services to a wide range of clients.