TADB unlocks 300m US dollar private capital for agriculture

ANTALYA: TANZANIA has unlocked more than 300m US dollars in private financing for the agricultural sector through a credit guarantee scheme, strengthening access to finance for smallholder farmers and agribusinesses.

The financing has been mobilised through the Smallholder Credit Guarantee Scheme (SCGS), managed by the Tanzania Agricultural Development Bank (TADB), whose core capital stands at about 50m US dollars.

Speaking during a COP31 side event at the Tanzania Pavilion, organised by the Government through the Ministry of Agriculture in collaboration with CARE International, TADB Managing Director Frank Nyabundege said the scheme had, over eight years, enabled 22 partner financial institutions to extend financing to more than 680,000 smallholder farmers, women and young people.

He said the scheme addresses one of the major barriers facing agricultural borrowers, particularly smallholder farmers, by providing credit guarantees that help them meet collateral requirements.

The Managing Director said the initiative demonstrates how public and concessional finance can be strategically deployed to reduce lending risks and attract private capital into agriculture.

He noted that agriculture had for a long time been perceived as a high-risk sector, largely due to inadequate understanding of its unique financing requirements, including seasonal production cycles and the complexities of agricultural value chains.

He said TADB had addressed the challenge through its Integrated Value Chain Financing (IVCF) Model, which finances activities across the entire chain, from production and aggregation to value addition and export markets.

According to him, the approach enables financial institutions to better understand agricultural businesses, manage risks and structure loans in ways that support sustainable production and repayment.

He added that technical assistance and training provided to partner financial institutions through the Bank of Tanzania (BoT) Academy’s Agriculture Financing curriculum were also helping improve agricultural lending practices.

The bank also provides training on climate financing frameworks and technical support to farmers and small and medium-sized enterprises operating in the agricultural sector.

He said co-financing arrangements, through which TADB collaborates with other financial institutions to finance agricultural projects, were another important instrument for attracting commercial lenders and expanding access to finance.

He stressed that blended and inclusive financing would be essential in mobilising resources needed to strengthen climate-resilient agriculture and support the country’s long-term development ambitions.