THE African Development Bank Group (AfDB) and CRDB Bank Plc (CRDB) have signed a US$ 120 million (approximately 260bn/-) loan agreement in Nairobi to finance infrastructure and Small and Medium Enterprise (SNE) projects in Tanzania.
The loan will support infrastructure
development, particularly the power and transport sectors, which are
major constraints for the country’s economic diversification and growth.
The SME sector is also key to creating
more jobs and this project will support a wide range of SMEs across
agriculture, construction, manufacturing, education and services in
order to promote inclusive growth in the country.
CRDB has a wide geographical coverage of
the Tanzanian market where it operates over 120 branches across the
country and an additional three branches in Burundi. The bank has been
supporting various sectors such as power, manufacturing, agriculture and
SMEs over the past years.
In 2008, the AfDB provided a
risk-sharing facility to promote SMEs in the agriculture sector, through
which more than 270 SMEs benefited. Since 2008, CRDB has expanded its
SME loan portfolio and partnered with more than 1,739 agents, or
nonbanking intermediaries to widen its reach.
This is “Agency Banking” for which CRDB
obtained a license from the Bank of Tanzania and the model has enabled
the bank to provide services in far-flung areas where establishing
branches may be uneconomical hence efficiently allowing the financially
excluded to access banking services.
The Line of Credit (LOC) will help finance SMEs and infrastructure projects in Tanzania.
It will provide valuable support towards infrastructure development which is a major constraint to Tanzania’s economic growth.
The LOC will also help to scale up
lending to SMEs and women enterprises in both urban and rural areas to
create more jobs and promote inclusive growth for Tanzania’s economy by
leveraging CRDB’s network of branches and banking agents.
The LOC will potentially support
regional trade and thus promote regional integration through expanding
capacity of the country’s port and airport as well as stimulate tourism
and government revenues in coming years.
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