TADB, Exim bank partner to boost agri loan

DAR ES SALAAM: TANZANIA Agricultural Development Bank (TADB) has sealed a five-year agreement with Exim Bank to provide guarantees for loans in the agricultural sector worth 30bn/-.

The agreement for fiveyear guarantee signed in Dar es Salaam yesterday will be provided through TADB’s Smallholder Farmers Credit Guarantee Scheme (SCGS).

The pact, valued at 30bn/- will enable the Agri-bank to catalyse access to capital for farmers and other value chain actors through Exim Bank where Exim Bank will extend credit across agricultural value chain including livestock and fisheries.

TADB will provide credit guarantee of up to 70 per cent of the loans especially for youths, women and climatesmart agriculture projects.

Micro, Small, and Mediumsized processors (MSMEs), crop-small farmer, livestock and fisheries will continue to benefit through this partnership with loans from Exim Bank throughout the country.

Speaking at the signing ceremony yesterday in Dar es Salaam, TADB Managing Director, Mr. Frank Nyabundege, commended Exim Bank for seeing the importance and opportunity of joining forces in agricultural transformation in the country through provision of Agri-loans.

He said the agreement will enable Exim Bank to increase the scope of lending in the agricultural, livestock and fisheries value chains.

Mr Nyabundege said, TADB understands access to capital and affordable terms to farmers are among the challenges facing agricultural sector in the country.

He said that was the reasons the Agri-bank partners with commercial banks, financial institutions and other stakeholders in catalyzing access to capital in affordable terms to the agriculture, livestock and fisheries sector in the country.

“For many years, we have seen small-holder farmers in the country struggling to access affordable capital and loans.

Many had no option but to accept difficult terms and high interest rate loans which have been very challenging for them in making repayments,” “As a development finance institution, through our innovative guarantee scheme for smallholder farmers, we have taken the necessary action to promote and incentivize banks and other financial institutions to offer appropriate and affordable financing solutions, so as to enable many farmers in the country to access affordable capital and loans for transformation of the sector,” he explained.

On his part, the Chief Financial Officer of Exim Bank, Mr. Shani Kinswaga, said that they have reached a decision to partner with TADB with the aim of increasing strength.

“We are thankful that we have reached an agreement with TADB, our main intention is to ensure provision of Agri-loans to many farmers and agribusiness enterprises in the country and enable them to transform lives, create employment and contribute to the growth of the country economy.”

“These loans are accessible across all our branches in Tanzania mainland and Zanzibar. We would therefore like to call upon all small-holder farmers and SMEs to take charge of this opportunity,” he explained.

Exim Bank Partnership makes the total number of financial institutions benefiting from Smallholder Farmers Credit Guarantee Scheme (SCGS) reaching 17.

These institutions include Commercial Banks, Corporative Banks and Microfinance Financial Institutions capable of serving farmers through their network of more than 700 branches across the country.

Up-to the end of April 2024, TADB through SCGS has approximately guaranteed total loans amount 300 bn/- benefiting more than 23,940 direct beneficiaries and 897,900 indirect beneficiaries from 27 regions and 129 districts in Tanzania mainland and Zanzibar.

Among them more than 95 per cent of all beneficiaries are smallholder-farmers, livestock and small fishermen.

This strategic collaboration between TADB and Exim Bank signifies a concerted effort to address the financial challenges faced by farmers and agribusinesses.

As agriculture remains the backbone of the nation’s economy, such initiatives are imperative to unlock its full potential and ensure a thriving agricultural landscape for years to come.