How agribank loans push sector’s growth

THE Tanzania Agricultural Development Bank (TADB) is walking the talk in implementing agricultural reforms in the country through its recorded growth in capital and loans.

From an initial capital of 60bn/- (2015) to 302.5bn/- estimated as 407.17 per cent increase recorded in December last year and 80 million Euros (about 212bn/-) concessional loan obtained from the France Development Agency (AFD), the bank is liquid enough to carry out its operations.

The 212bn/- concessional loan was obtained following President Samia Suluhu Hassan’s visit to France in April last year.

TADB Managing Director, Mr Frank Nyabundege disclosed this while presenting the bank’s implementation report from 2015 to December 2022 during a meeting with members of the Tanzania Editors Forum (TEF) and journalists in Dar es Salaam, yesterday.

Mr Nyabundege said the amount of loans issued by the bank grew from 776m/- in 2015 to 516.1bn/- in 2022, thereby benefiting a total of 1,655,374 beneficiaries engaged in various farming activities across the country.

“With enough liquidity, the bank can effectively execute its goals which in turn, lead to an increase in employment opportunities, income as well as improvement of lives of people in the country,” said Mr Nyabundege.

In further boosting the bank’s operation, he noted that in 2018 the government issued 25 million US dollars (about 57.8bn/-) to TADB to manage the Smallholder Farmers Credit Guarantee Scheme (SCGS) funds, aimed at encouraging other banks and financial institutions to scale up their pace in offering credits to small medium enterprises.

According to the MD, the initiatives clearly reflect President Samia’s commitment to transform the sector, which is considered the backbone of the economy as over 60 per cent of the country’s population engage in the sector.

He noted that in the president’s first inaugural address to the Parliament in April 2021, she revealed the plan to prioritise the sector and ever since, the push has been vivid.

Recently, the MD said the National Assembly passed a sum of 235.9bn/-, which will support the Tanzania Investment Bank (TIB) and TADB in ensuring that the two banks possesses enough capital.

While presenting the budget, Finance Minister Dr Mwigulu Nchemba underscored the government intention to continue dishing out enough capital to TADB to the tune of 1tri/- in five to 10 years, so as to arrive at the envisioned goals.

Besides, Mr Nyabundege said growth in loans is being attributed to access to capital and expansion of the bank’s activities through opening of six zonal branches and two others are underway.

The branches have been opened in the Lake Zone specifically Mwanza (Mwanza, Kagera, Shinyanga, Simiyu, Mara and Geita, Dodoma for Central Zone (Dodoma and Singida) and Mbeya for Southern Highlands (Mbeya, Iringa, Songwe, Njombe and Rukwa).

Others are Tabora for Western Zone (Tabora, Kigoma and Katavi), Dar es for the Eastern Zone (Dar es Salaam, Morogoro and Coast Region) and Mtwara for the Southern Zone servicing Mtwara, Lindi and Ruvuma.

He pointed out that the bank was in the final stages to open branches in the Northern Zone in Arusha (Kilimanjaro, Manyara and Tanga) and plan to open an office in Zanzibar, whose uptake is expected to be finalized by December.

“TADB has continued to operate profitably aside from minor challenges incurred due to slow down of the economy…the rate of non-performing loan is at 5.46 per cent, indicating a good trend of loan repayments by beneficiaries,” he said.

He added: “Profit recorded after revenues grew from 449.7m/- (2015) to 11.38bn/- (2022) which is equivalent to an increase of 2,438.9 per cent due to a growth in the bank’s revenues and reduction of cost of operation.”

On the other hand, the bank’s assets have also grown from 61.6bn/- (2015) to 447.9bn/- (2012) equivalent to 627.1 per cent.

Mr Nyabundege indicated that TADB in collaboration with the Ministry of Livestock and Fisheries is implementing the Blue Economy for Growth (BE4G25) project, whose aim is to increase production of seaweed and fish through cage farming.

Such projects are being implemented in all water bodies in the country including Lake Victoria, Lake Tanganyika, Lake Rukwa and Lake Nyasa and in regions accessing the Indian Ocean, whereas a special desk has been established for offering loans at zero per cent interest rate and already 34bn/- has been allocated for development of the fishery and agricultural sector.

To further boost the agricultural sector, the government established the ambitious Building a Better Tomorrow (BBT) project to increase employment for the youth going through rigorous training before actual implementation, noting that already 812 youth have been taken onboard.

He revealed that another 34bn/- has been allocated by the government for the establishment of BBT to support the fisheries and livestock sector.

The MD maintained that the government is making all efforts to ensure its people easily access products and at affordable costs, citing an example of sugar, cooking oil and among other food products whose demand was low.

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