Affordable interests on credit facilities to benefit farmers in the country

FOOD crop farmers across the country will soon get a relief on credit facilities with which to conduct their agricultural activities at affordable interest rates from the newly established Tanzania Agricultural Bank (TADB), a national bank for farmers in the country.  The Bank’s Managing Director Thomas Samkyi made the remarks last week in Dar es Salaam at a one day workshop organized by the appointed Board members of the bank for agricultural stakeholders who met to deliberate on the 20 years strategic plans for the banks effective from 2016 to 2034. According to Samkyi, once the banks’ operations starts food crop farmers will be allowed to take loans to enable them buy agricultural implements so as to make them increase their food crop production, unlike the case as it is now whereby farmers are exceptional and unable to increase output due to poverty. He said that, the provision of loan facilities at affordable interest rates to farmers was among the factors for which the bank was established in 2013, and this was after having realized that the agricultural growth is largely constrained by low productivity, lack of knowledge on modern practices and inputs. He said one of the major problems facing the agricultural sector in the country is the inadequacy, inappropriateness and high cost of medium and long term finance to support the growth of the sector which requires low interest rates, loans with long term maturity. Other reasons for the bank’s establishment is to contribute towards achieving the agricultural sector growth which employs more than 70 percent of the country’s workforce and account for most of the raw materials for Tanzanian industries. 

Minister for Agriculture and Food Security, Steven Wasira

Other reasons are to facilitate building supporting infrastructure like irrigation, transport, storage, market infrastructure and processing facilities, and also to lead as an apex agriculture financing bank in capacity building strategies and program to strengthen the agricultural financing value chain. The bank which was established in 2013 is fully owned by the Tanzania government with a starting capital of Sh. 1 billion which the government shall be increasing the yearly amount of Sh. 100 million, said a member of the Board Andrew Temu. He said in an exclusive interview that, the bank’s objective is to reach its targets Sh. 500 billion by 2034 when its long term strategic plans comes to an end. On his part, the newly appointed Minister for Agriculture and Food Security, Steven Wasira has assured the Board members of the bank that, the government through his ministry would work closely with them. In his speech which was read on his behalf by the ministry’s Permanent Secretary Sofia Kaduma, he has insisted areas to be given priority as those which would need research development activities that would give big results quickly. Minister Wasira has also directed the bank to cooperate with the ministry of finance so as to organize closely with a view to let farmers get loans at affordable interest rates than what other commercial banks do in the country. Wasira has also instructed the Board members to overlook deeply especially by giving education to the people in the country so that to evaluate on which relevant areas that could first be easily tackled appropriately for the quick development. TADB obtained a provisional license to operate as a development financial institution (DFUI) from the Bank of Tanzania (BOT) in December 2014. Subject to full license from the BOT, initial financing operations are expected to commence in the third quarter of 2015.