Tanzanian Govt. Comes To Farmers Rescue With First Agricultural Bank

Tanzanian Govt. Comes To Farmers Rescue With First Agricultural Bank

Tanzania’s cash-starved farm sector will get its first agricultural bank after the government said it had set aside $28 million in seed capital to start the financial institution that will lend to local farmers to enable them access inputs and reach their markets.

According to Reuters, the government said it will invest over $380 million in the Tanzania agricultural Development Bank (TADB) over the next eight years to boost the sector, which has for long been plagued with low productivity and lack of financing.

In a statement to launch the state-run agricultural bank, President Jakaya Kikwete said about three-quarter of Tanzanians depended on agriculture for their livelihoods and the sector contributed 25 percent of the country’s gross domestic product and accounts for 34 percent of the country’s export earnings each year.

“The bank was established to address market failures in agricultural financing in order to enhance growth in the sector, primarily by catalyzing and offering loans and related non-credit services to enhance farmers’ access to finance and financial inclusion,” TADB’s Managing Director, Thomas Samkyi, told reporters in Dar es Salaam last week ahead of the Saturday launch.

Samkyi said that bank will provide farm credit at lower than market interest rates and will afford flexible repayment and collateral terms to borrowers, Tanzania Daily News reported..

This, he said, will be possible through access to low cost financing from the government and other international agricultural institutions such as the Alliance for a Green Revolution in African (AGRA) and others.

“Statistics show agricultural productivity is very low in the country for different reasons, including the use of outdated implements such as the hand hoe,” President Kikwete said in his speech, adding that over 62 percent of Tanzanian farmers did not use modern farm technologies.