Dar es Salaam. 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 Sh45 billion) 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 Sh1.12 trillion, with Pass guaranteeing Sh122 billion, about 11 per cent of the total agricultural lending.
Mr Bohay was recently quoted in Dar es Salaam as saying that the organisation, working with various partners, is determined to intensify agricultural production and improve processing through assistance to producers and entrepreneurs’ access to bank loans, training and facilitate access to markets.