SMALLHOLDER farmers struggling to secure loans have all reasons to smile after the Tanzanian government yesterday injected 209.5 billion /- into the Tanzania Agriculture Development Bank (TADB), via a soft loan from the African Development Bank (AfDB)
The money is aimed at expanding TADB’s capital and allow it to fulfil its main role of financially empowering farmers and agro-processing entrepreneurs by giving them access to low-interest loans.
“This is a sign that agricultural transformation is possible because we at TADB can now increase the pace at which we are operating,” the bank’s acting managing director Francis Assenga said yesterday after signing for the funds.
According to Assenga, the main challenge facing the agriculture sector is access to finance. The new funds received the bank will reach as many farmers as possible, allowing them to contribute more to the economy, he added.
TADB is a state-owned development finance institution (DFI) established to catalyse delivery of credit facilities for development of agriculture in the country.
It is also dedicated to mobilising financial resources and supporting smallholder farmers with low interest loans.
The bank is structured to deliver short, medium and long-term lending through refinancing, wholesale lending, direct lending, co-financing, syndications, leveraging/ guarantees, and infrastructure financing to address financing gaps in the value chains of focus.
The deputy permanent secretary in the Ministry of Finance and Planning, Dr Khatibu Kazungu, said the government is working to see that the bank gets at least 800bn/- needed to effectively fulfil its mandate.
“We want to see the agro sector grow at a pace of at least 7 per cent, and we believe this bank can help to improve agro-processing and development of small industries through empowering small-scale farmers,” Kazungu added.
Tanzania has been a beneficiary of AfDB loans amounting to $284 million (625bn/-) issued between November and December last year, out of which $94 million (207bn/-) will be used for agricultural development.
The loans were in line with AfDB’s terms of reference for its existence known as ‘feeding Africa, lighting up Africa, integrating Africa, improving the African quality of life, and industrialising Africa’.
Challenges facing the agricultural sector include inadequate physical infrastructure to support it, the continued use of poor farming techniques, limited access to quality farm inputs, and lack of marketing data and information, among others.