Stawi Bond is game changer: More needed

IMAGINE a Tanzania where farmers, fishers, entrepreneurs and small-scale traders all have easy access to affordable financing, not because the government stretched its budget thin, but because state-owned institutions raised the funds directly from the people through innovative financial instruments.

Recently, the country took a bold step closer to this vision with the launch of the Stawi Bond by Tanzania Commercial Bank (TCB), a state owned bank. This landmark initiative deserves nothing less than applause.

TCB has demonstrated financial ingenuity by shifting from the traditional reliance on government budget allocations and instead, mobilising 150bn/- through a MediumTerm Note Programme, beginning with the Stawi Bond worth 50bn/-.

With an annual return of 13.5 per cent payable quarterly over five years and an accessible minimum entry of just 500,000/-, the bond opens the door for ordinary citizens, entrepreneurs, private and public institutions to participate directly in national investment.

But beyond the attractive returns, what makes this bond truly historic is its alignment with the national agenda of financial inclusion, SME empowerment and economic self-reliance. By directing proceeds toward expanding SME financing, Stawi Bond not only strengthens the backbone of our economy, small and medium businesses, but also reduces reliance on costly foreign borrowing.

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This is a practical demonstration of innovation in stateowned finance and for that, both TCB’s leadership and the Government of Tanzania deserve recognition. Allowing a state-owned institution to tap into the capital markets reflects forward-thinking policy that matches vision with action.

Beyond TCB: Expanding the model

The success of Stawi Bond should not be the end, it should be the beginning. The country has other state-owned enterprises with enormous potential to transform key economic sectors but are often constrained by limited funding tied to government budgets. If these institutions were empowered to issue similar bonds, the ripple effects on the economy could be groundbreaking.

Take for example the Tanzania Agricultural Development Bank (TADB). If TADB were to issue an “Agriculture Bond,” funds raised could be channelled into financing crop production, livestock development and fisheries projects.

The impact? Increased food security, job creation, export growth and a stronger rural economy. Or imagine coming with the innovative products like “Samaki Bond”, designed to empower small- and medium-scale fishers, many of them will have access to affordable financing to scale their businesses and hence impact positively the national economy.

Similarly, a “Horticulture Bond” could unlock value chains in fruits, vegetables and flowers, increasing Tanzania’s export footprint and bringing in much-needed foreign exchange.

A “Utalii Bond” could be designed to support tourism-linked SMEs, helping them expand services, build infrastructure and t a p into global tourism markets. And this vision need not to stop at national banks or sector-based enterprises. Municipal Bonds could give local governments a chance to finance infrastructure, markets and services directly, creating jobs and improving livelihoods in their jurisdictions.

A platform for inclusive growth

What makes the bond model so compelling is not just the capital it mobilises, but the inclusivity it fosters. Citizens are no longer spectators of national development, they become direct investors in it. With as little as half a million shillings, Tanzanians can now earn secure returns while fuelling the growth of SMEs.

This dual benefit of personal financial growth and national economic progress is exactly the kind of inclusive development our nation needs.

Moreover, this model builds financial literacy, broadens participation in the capital markets and strengthens a culture of savings and investment among Tanzanians. It also creates a new pipeline for sustainable, long-term financing that can supplement government efforts without overburdening the national budget.

The road ahead

The launch of Stawi Bond is more than a milestone for TCB; it is a blueprint for Tanzania’s future financing strategy.

By enabling stateowned institutions to mobilise funds directly from citizens and investors, we open a new chapter of innovation-driven financing that can accelerate economic growth, empower SMEs and foster self-reliance. The time has come to scale this model across sectors, from agriculture to fisheries, horticulture to tourism and even at the municipal levels.

Each bond issued is not just a financial instrument but a symbol of citizen participation in national development. As Tanzanians, we must celebrate this bold innovation, but more importantly, we must call for more of these initiatives. With the right policies, the potential is limitless and the impact on our economy could be transformative.