AGF, TADB partner to boost agribusinesses financing in Tanzania
07-07-2021 14:54:00 | by: Pie Kamau | hits: 2059 | Tags:

African Guarantee Fund for Small and Medium-sized Enterprises (AGF), signed a Memorandum of Understanding with Tanzania Agricultural Development Bank (TADB), to allow the bank disburse up-to $20 million worth of loans to agribusinesses in Tanzania. The MoU will enable the agri-bank to guarantee SMEs in the agri-value chain applying directly for loans at the bank.

While access to credit is the major constraint, most SME owners prefer not to borrow due to high interest rates, lack of collateral, absence of institutions to lend their businesses and more often than not, they do not know how to go about it. Thus, the importance of this MoU.

Japhet Justine, Managing Director, TADB: “We are proud to be one of the initial institutions in the country to spearhead the FYDPIII. This deal realizes one of our roles as a Development Finance Institution in mobilizing low-cost sustainable financial resources for affordable agricultural financing and enhancing financial inclusion. In the new FYDPIII, the government has reiterated its commitment in promoting the private sector and non-state actor’s participation in economic development. Interventions to further deepen industrialisation, driven by Science Technology and Innovation (STI) capabilities for value addition in manufacturing and productive sectors including agriculture, fishing, livestock are mentioned as its top priorities.” 

Jules Ngankam, Group CEO, AGF: “AGF views TADB as a very strategic partner in achieving significant impact within the SME sector in Tanzania. TADB as a government owned DFI, has the required capacity to lend to SMEs and particularly in the critical agricultural sector. Through the MoU, AGF will consider providing individual guarantee relating to loans granted to Tanzanian agri-SMEs on a case-by-case basis. With the backing of such guarantees, TADB is proposing to disburse $20 million of loans to Tanzania agri-SMEs. While this partnership is of great importance to SMEs owners and prospects in Tanzania, it is also a trailblazing opportunity for women-led or owned businesses. Through the Affirmative Finance Action for Women in Africa (AFAWA) partnership that we have with the African Development Bank Group (AfDB), AGF will also be able to extend the AFAWA Guarantee Facility to TADB to increase financing of Tanzanian women-owned agri-business. Women businesses in different agricultural value-chains will be able to access loans from TADB on much better terms.” 

Some of the criteria to be used to asses a female agri-business may include but not limited to; situations where the board of the business, the shares, business founder is a woman. Also, whenever the workforce, or the produce directly benefits more women, that too will be a consideration for the business to access a more advantageous interest rate to the finances they require.

www.africanguaranteefund.com