PRIVATE Agricultural Sector Support Trust (PASS) guaranteed loans to agriculture are likely to increase substantially, thanks to partner banks that have pledged more funding to farming activities.
The National Microfinance Bank (NMB) and
CRDB Bank, the major partners of PASS in provision of credits to
collateral challenged peasants, have expressed interest to intensify
working relations with the trust to reach more needy peasants in rural
areas in particular.
According to the central bank’s Banking
Supervision annual reports and the two bank’s annual reports of 2016,
NMB and CRDB account for over 50 per cent of agricultural loans in
Tanzania.
In a tripartite meeting of PASS, the
financial institutions and the visiting Swedish International
Development Cooperation Agency (SIDA) Director General Carin Jamtin in
Dar es Salaam on Tuesday, that was also attended by CEOs of NMB, Ms
Ineke Bussemaker and CRDB Bank, Dr Charles Kimei, the two banks promised
to enhance their current work with PASS.
According to a PASS statement in the
city yesterday, the entry of Sweden in the trust's activities has
boosted the confidence of existing and potential partners.
"The backing of triple 'A' rated Sweden
to our operations has given more confidence to the financial
institutions that we work with," PASS Managing Director Nicomed Bohay's
signed statement said.
The Swedish government through SIDA mid
last month signed a 20 million US dollar (about 45bn/-) Guarantee
Agreement with PASS, the first of its kind in Tanzania.
The seven-year partnership is expected
to boost business development support and lending to Micro, Small and
Medium Sized Enterprises (MSMEs) in the country's agricultural sector.
The visiting SIDA top executive promised
to convince more Swedish investors to explore business opportunities in
Tanzania, especially in the agricultural sector, Mr Bohay said in the
statement.
"Sweden has brought in gender, youth and
environmental perspectives in our operations," said Mr Bohay, adding
that access to finance by women and youth especially in rural areas is
the trust's top priority for now.
PASS has recently played key role in
financing agricultural activities in the country, with the Bank of
Tanzania reports showing that the trust guaranteed loans account for
over 10 per cent of the total credits to agriculture.
In 2016, for instance, the central bank
reported the total bank loans to agriculture being 1.12tri/-, with PASS
guaranteeing 122bn/-, about 11 per cent of the total agricultural
lending.
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