Three major Tanzania banks, the Cooperative and Rural Development Bank (CRDB), the National Microfinance Bank (NMB) and the KCB Bank Tanzania say they will assist selected businesses with Sh700 billion received from the European Investment Bank.
The selected businesses include small and medium-sizes enterprises, start-ups, and women-owned businesses.
The three banks received a total of Sh1.4 trillion ($540 million) from the EIB, and on Friday, 24th February, they signed separate agreements with the EIB agreeing that Sh700 billion (270 million euros) will be spent to support the aforementioned businesses categories.
Of the 270 million euros reserved for assisting the businesses, 170 million euros will be spent on better crediting women-owned businesses, while the remaining 100 million euros will go to companies in the Tanzanian blue economy
Managing director of KCB Tanzania, Mr Cosmas Kimario has said that the new credit line is more significant now since its five to 12 years long-term nature will allow SMEs to have more manageable loan payment timeline, letting them grow faster. Also, the businesses will be granted a two-year grace period before they can start payments.
He added that it was very beneficial that the EIB assisted in the time it did, saying that the banks had yet to fully recover from the effects of the pandemic. “The timing is also excellent. We need as much financial resources as we can get to fully recover from the effects of Covid-19 pandemic.”
CRDB and NMB Bank Plc to receive 150 million euros and 100 million euros respectively.
According to CRDB’s Managing Director, Abdulmajid Nsekela, the bank will receive 150 million euros to loan out to its SMEs.
“Having adequate access to credit is essential for SMEs to growth. And when you talk of small and medium businesses you talk of women, so the gender factor is appropriate here,” Mr Nsekela said.
The Treasurer for NMB Bank Plc, Mr Aziz Chacha, said his bank too would receive 100 million euros. He added that it was Tanzania’s good business environment that allowed the deal to be finalised.
“We should attribute this deal to Tanzania’s good business environment and the country’s ability to attract foreign capital and attracting new investors.”
EIB wants Tanzanian companies to expand and create jobs.
EIB vice president Thomas Östros said this new financing was part of European partners zeal to see Tanzania’s business sector flourish and create jobs.
“The new business financing confirmed today in Dar es Salaam demonstrates the close cooperation between Tanzania and European partners to ensure that Tanzanian companies can expand, create skilled jobs, and explore new business opportunities in the years ahead,” he said.
The signing of the agreement between EIB and the three local banks yesterday marked the end of the two-day business forum in Dar es Salaam which was organized by the European Union, and which also saw over a thousand people participating.
