M a r k e t N e w s

Tanzania: NMB to Provide Sh60 Billion Loans for Agriculture Sector

Posted on : Friday, 24th June 2016

Dar es Salaam — Tanzania's vision of becoming a middle income country by 2025 through agriculture-led industrialisation will receive a boost as the National Microfinance Bank (NMB) announced to set Sh60 billion for developing agribusiness in the next five years.

Agriculture employs about 70 per cent of the Tanzanian workforce contributes about 27 per cent to the gross domestic product.
It also accounts for 85 per cent of the country's exports.
The government set up the Tanzania Agricultural Development Bank (TADB) with a capital base of not less than Sh60 billion to offer loans to farmers.
According to TADB, the government's aims to increase the the loan portfolio to agriculture to Sh800 billion in the next five years.
NMB managing director Ineke Bussemaker said they are giving the agricultural sector priority because the vision of the bank's shareholders -- the Tanzanian government and Rabobank of the Netherlands -- is to promote agribusiness.
She said Sh60 billion would double in the next few years depending on farmer's initiatives and their demand for loans.
She explained that the banks five year plan includes a substantial part of financing loans for smallholder farmers who play a vital role in the agricultural sector.
"Our bank has decided to play a vital role in the agricultural value chain and pioneered warehouse receipt financing for the country's Amcos [agricultural marketing cooperative societies]," she said.
According to her, food and agribusiness continues to be a significant part of NMB's business, providing input to hundreds of Amcos' financing emerging and commercial farmers and supporting processors and traders of agricultural commodities (value chain) with their trade finance foreign exchange and investment needs.
To support the initiative, she said that the bank has hired loan officers throughout the country who will be closer to the farmers and enable easier access of loan facilities.
Further she said that the bank has recruited one member of the team who will be dedicated for agribusiness and monitoring other officers countrywide.
She explained that the bank aims to reach farmers in different ways including the use of mobile phones to train them on how to access loans as well as other forms of communication including crops development challenges among others.
"We are also advising farmers to open accounts with us because as long as we identify them as our clients, it becomes easier to loan them," she said.
She explained that currently, NMB has at least 2.1 million customers, which means that about 40percent of all Tanzanians who have a bank account actually hold an account at NMB.
She said the bank also finances a rapidly growing SME segment with over 60,000 customers.
Meanwhile on his part, the TADB director of credit and business, Mr Robert Pascal , said the bank had 89 farmers' cooperative groups with a total 21,526 farmers on matters related to writing project proposals with a view for seeking loan facilities.
Explaining he said that those who are liable to get loans comprise small scale farmer in corporative groups, small scale farmers who are being helped by large scale farmers and large commercial farmers.
Mr Pascal explained that their loans comprise of short term loans of 1 to 2 years whose interest rate is between 7 and 8percent for small scale farmers who mostly do small scale farming.
Medium-term loan of two to five years at an interest rate of nine to10 percent for purchasing tractors, grinding machines and post-harvest technology.
The third scheme is the long term loan of to 15 years of an interest rate of 11 to 12 per cent construction of markets, irrigation farming and expansion of commercial farming.

Source : allafrica.com
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