ABSA Bank Tanzania has signed a 20bn/-loan guarantee facility with the African Guarantee Fund (AGF) to boost credit accessibility for Small and Medium-sized Enterprises (SMEs) including start-ups.
The partnership, through AGF’s capacity development assistance, will enable the lender to support small firms to enhance their businesses especially those who have limited capital and not eligible to access elsewhere.
The contract signed by the lender and the AGF is expected to be in action for five years.
Absa Tanzania’s Managing Director and CEO, Mr Obedi Laiser, said the agreement will help the SMEs to get access to loans that will facilitate their businesses under the assurance of the AGF.
“Considering the financial challenges facing many SMEs, including lack of security, Absa is always looking for ways to reduce possible risks in this segment,” said Mr Laizer.
He further said the lender is optimistic to extend the portfolio by exceeding the amount to 100bn/- to ensure youths and females are enabled in effort to boost their financial statuses.
“We began with 5bn/- in 2020 but we are likely to increase the figure to 100bn/- in three to five years to come purposely to extend our support to enable these groups to flourish their financial statuses.
“This partnership is just a segment of our process of fulfilling our goal of empowering the future of African society,” he said.
AGF Group Chief Executive, Mr Jules Ngankam, said the funding will help in closing the financial challenges facing the SMEs and will boost their businesses.
“We are very pleased to extend our partnership with Absa Tanzania which will provide particular support to the youth and women businesses including the start- ups by getting the access to loans,” said Mr Ngankam.
Absa Head of Business Banking, Mr Melvin Saprapasen stressed that the previous amount was intended to reach 10 to 20 SMEs, but it only reached three, so by extending the funds will undoubtedly reach more beneficiaries.
He said that until now 30 SMEs have been reached under this programme and it is projected to exceed 100 by the end of this year.
