Women, blue economy get massive boost

President Mwinyi addresses first ever Tanzania - EU Bussiness Forum

THE European Investment Bank (EIB) has signed an agreement worth 270 million Euros (equivalent to 666.5bn/- ) with three  local banks  to support  private sector companies with special focus on small and medium enterprises from both Mainland and Zanzibar.

The agreement was signed in Dar es Salaam yesterday between EIB and executives from   National Microfinance Bank (NMB), CRDB Bank and Kenya Commercial Bank and witnessed by Zanzibar President Dr Hussein Mwinyi.

Vice-President of EIB, Mr Thomas Östros said of the amount,   150 million Euros has been channeled to CRDB, 100 million Euros to NMB and 20 million to KCB, with the banks acting as intermediaries.

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“The local banks will lend at least 30 per cent of the funds to gender companies or companies active in the blue economy sector,” he said.

He explained that recently the EIB and EU approved investment of 370 million Euros for private sector companies   for both Mainland and Zanzibar of which 270 have been channeled to the three banks.

Mr Östros said the investment will be accompanied by 16 million Euros grant from the EU that will enable participant banks to invest in blue economy and gender companies.

“The grant will be used to train companies on one side on how to build projects eligible for this type of finance, and at the same time train banks to better understand gender and blue economy clients,” he said.

He added that participating local banks will be supported to develop and implement reporting systems desegregated by gender, age, sector such as blue economy.

He further said that supporting entrepreneurs and businesses to enable job creation, expansion into new markets and long term growth requires solid understanding of the investment challenges, and being able to see   the investment opportunities.

He said EIB is grateful for the excellent cooperation and professionalism shown by the three banks for doing the perpetration of the new initiative.

The EIB is the world largest international public bank. It is owned directly by 27 European   Union member states.

He said since the start of Covid-19 pandemic the EIB has provided more than 6billion Euros of investment for African companies impacted by the pandemic and more recently by trade shocks triggered by Russia   invasion of Ukraine.

The second agreement worth 125 million USD was signed between the Dutch Development Bank (FMO) and the NMB senior loan facility for long-term client NMB Bank in Tanzania.

Director of Financial Institutions at FMO, Marnix Mansfort   said the senior loan has been provided in partnership with French Development Finance Institution, Proparco, contributing 50 million US dollars to the total facility and will be used for financing medium SMEs, women owned – and agri-businesses.

The facility demonstrates FMO and Proparco’s commitment to driving Tanzania’s growth in partnership with solid local institutions.

The third agreement worth 11 million USD was signed between FMO and NMB for lending to women and youth related projects.

He said the risk sharing facility will be used to support NMB Bank in increasing financing for micro, small and medium-sized enterprises (MSMEs) operating in Tanzania.

FMO’s NASIRA risk sharing programme supports financial institutions to increase financing for MSMEs with a focus on underserved business segments, such as women-owned and youth-owned businesses, who often remain underbanked due to high risks – both perceived and real – involved in lending to them.

FMO’s NASIRA programme contributes towards narrowing the financing gap for these segments by sharing possible credit losses with the financial institutions and thereby reducing the risk involved.

Next to the risk sharing facility, the NASIRA programme also includes technical assistance funding to support the financial institutions with serving the new segments, as well as a portfolio management tool to enable an automated monitoring process.

 

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