The Tanzania Agricultural Development Bank (TADB) has entered into a new agreement with the Tanzania Commercial Bank (TCB) to enhance credit guarantees for small-scale farmers through the Smallholder Farmers Credit Guarantee Scheme (SCGS).
The five-year partnership, signed in Dar es Salaam, is valued at 21 billion TZS, a significant increase from the 7 billion TZS allocated in 2018 when the credit guarantees for smallholder farmers were initially introduced.
Managing Director of TADB, Mr. Frank Nyabundege, stated in Dar es Salaam that the renewed agreement, implemented through SCGS, aims to double the accessibility of loans for smallholder farmers compared to previous years.
"With the new partnership, we expect to increase the number of credit provisions to smallholder farmers," said Mr. Nyabundege.
He emphasized that TADB has raised the rate of credit guarantees for women and youth to 70%, up from 50% in 2018. The objective of the partnership is to expand lending in the agricultural, livestock, and fishery sectors, contributing to improved income among smallholder farmers, poverty reduction, sectoral development, and increased national income.
Mr. Nyabundege highlighted the productivity and benefits of the cooperation between TADB and TCB, noting that under the initial 2018 contract, TCB, with credit guarantees from TADB, provided credits worth 34.1 billion TZS to over 2,638 direct beneficiaries and more than 7,750 indirect beneficiaries.
"As the initial contract entered in 2018 comes to an end, TCB, through the credit guarantee from TADB, has already provided credits worth 34.1 billion TZS to more than 2,638 direct beneficiaries and more than 7,750 indirect beneficiaries," he added.
Until December of the previous year, the total loans guaranteed by TADB through SCGS amounted to 250.77 billion TZS. Over 19,400 people benefited as direct beneficiaries, with more than 897,900 as indirect beneficiaries across 27 regions, covering 87% of all regions in both mainland Tanzania and Zanzibar.
TCB Chief Executive Officer, Mr. Adam Mihayo, expressed optimism about the agreement's potential to promote exports, address the foreign currency deficit, raise individual incomes among farmers, herders, and fishermen, and create more job opportunities. He also applauded the government's efforts in strengthening state-owned financial institutions to bolster the nation's backbone sector.