Banks still stuck in traditional models
DAR ES SALAAM: MANY banks in Tanzania continue to rely on outdated financial models, limiting their ability to support green investments, stakeholders warned at the Green Finance Forum.
The CEO Roundtable of Tanzania (CEOrt) Executive Director, Ms Santina Benson, said during the forum held in Dar es Salaam last week that despite the crucial role played by the financial sector, many banks still operate under conventional approaches.
“It is time we begin to think differently about how we access funds to effectively contribute to the fight against environmental challenges,” she said.
She said the global green financing landscape presents vast opportunities, yet Tanzania continues to access only a small portion despite the fact that many Tanzanians are engaged in agriculture.
The GFF, organised by CEOrt, aimed to mobilise resources for a green transition and foster partnerships to scale sustainable financing.
Ms Benson said that although green finance holds great potential to drive the country’s sustainable transformation, businesses particularly Micro, Small and Medium Enterprises (MSMEs) continue to face significant challenges in accessing capital.
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Tanzania has committed to reducing greenhouse gas emissions by 35 per cent by 2030 under its Nationally Determined Contributions (NDCs), a target seen as vital in addressing pressing environmental issues such as deforestation, water scarcity and climate vulnerability.
Achieving a green and resilient economy by 2030 will require an estimated investment of USD 32 billion for climate adaptation and mitigation efforts.
Dar es Salaam Stock Exchange (DSE) CEO Mr Peter Nalitolela said the capital market is contributing to bridging the green finance gap through the issuance of thematic bonds supporting social and environmental goals.
He said over 700bn/- has so far been raised through the stock exchange via bonds such as the Tanga UWASA bond, CRDB’s green bond and NMB’s Jasiri and Jamii bonds.
“There are still many investment opportunities, especially for companies involved in solar and small-scale hydroelectric power generation,” he said.
“These companies protect the environment but often lack the financial backing they need to scale.” NMB’s Head of Investor Relations, Mr Innocent Yonazi, said forums such as the GFF provide a valuable platform for dialogue and action.
“This forum brings together various stakeholders, including financial institutions, to explore partnerships and secure the resources and funding necessary to solve environmental challenges and support business growth, particularly in the agriculture sector,” he said.
He said that for banking activities to have a meaningful impact on communities, there must be a conducive and enabling policy environment to support sustainable investment.
