Saturday, August 8, 2015

Kikwete gives farmers their own bank, plus Sh800bn

President Jakaya Kikwete launches the Tanzania

President Jakaya Kikwete launches the Tanzania Agriculture Development Bank ((TADB) in Dar es Salaam yesterday. Looking on (from left) are TADB board chairperson Rosebud Kurwijila; Finance minister Saada Mkuya Salum; Industry, Trade and Marketing deputy minister Janet Mbene and is Agriculture, Food Security and Cooperatives minister Stephen Wassira. PHOTO | SALIM SHAO 

By Felix Lazaro The Citizen Newspaper

Dar es Salaam. President Jakaya Kikwete yesterday launched the Tanzania Agricultural Development Bank (TADB) with a pledge that the government will raise Sh800 billion capital requirement in eight years.

The good news for farmers comes two days after the Bank of Tanzania (BoT) gave the new kid on the block a certificate of operation after satisfying itself that the institution met all requirements.

Mr Kikwete said the government would raise Sh100 billion every year to ensure the bank’s 20-year strategic plan is effectively implemented.

“It is the plan of the government to ensure agriculture is transformed by addressing challenges that have been retarding productivity, such as lack of effective financing packages,” he said. “That is why I have asked the management to look into proper financing packages in order to accommodate different farmers.”

The President challenged farmers to improve their productivity through loans from TADB.

The development bank will work with financial institutions, including commercial and community banks, savings and credit co-operative societies and a variety of other groups to extend loans to farmers. Individuals will also get loans provided they qualify.

To minimise risk, Mr Kikwete urged the management to use the Credit Reference Bureau to establish loan portfolios of borrowers before deciding whether or not to release funds as this would reduce the number of defaulters.

“I am glad to hear that the bank will use other institutions to extend their services to potential clients,” President Kikwete added. “I advise the management to come up with friendly criteria so that your loans are affordable to farmers, unlike loans from some commercial banks.”

According to the president, TADB should concentrate on supporting farmers financially as TIB Development Bank focuses on loans for investors in the agro-processing industry. “The capital that was injected in the agricultural window under TIB Development Bank will remain there to serve those who want to engage in the agro-processing industry,” Mr Kikwete added. “This will minimise competition among farmers, who will now get loans from the agricultural bank.”

The bank will focus on produce best suited to small and medium outfits. These include maize, rice, fruit, sesame, sugarcane indigenous chicken, horticulture, livestock, fish farming and bee keeping.

Finance Minister Saada Mkuya said the Treasury had released about Sh60 billion of capital that has gone into completing the process of opening the bank. “We have started some processes to raise the Sh800 billion required by the bank through Treasury bill,” she said. “We want to see the TADB loans go to farmers, who are our main our focus.”

TADB Managing Director Thomas Samkyi said the launch was a major milestone in the long journey to establish the bank that will bridge the financing gap in the farming sector.

He added: “The decision to start the bank was made in 2008, during the National Business Council meeting chaired by President Kikwete. It was agreed that the government raises $500 million--equivalent to Sh800 billion then--as seed capital.

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