NMB lending to farmers doubles

Dar es Salaam. The National Microfinance Bank (NMB) has more than doubled lending to farmers to hit the Sh108-billion mark.

NMB managing director, Ms Ineke Bussemaker, said the bank could still lend Sh100 billion more to boost the agribusiness as a key component in the industrialisation agenda.

She said NMB’s loan portfolio to agribusiness has been raised by 59.3 per cent from Sh44bn over the last 18 months.

“We are seeing positive developments on this front as more producers join the value chain. As a bank we believe that this is significant as agricultural transformation is key to industrialisation,” Ms Bussemaker noted.

She was speaking yesterday during her visit to Mwananchi Communications Limited (MCL) offices at Tabata Relini.

She held talks with MCL managing director Francis Nanai and managers.

“We are giving agribusiness priority because it is inseparable from industrialisation. We will support the government’s efforts of turning the country into an industrialised economy.”

She said 50 per cent of the loans went to smallholder farmers, with big players in the sector enjoying the rest.

According to her, the bank is currently targeting 13 agriculture subsectors compared with the past when only cash crop dealers got loans.

She believes that agriculture is the foundation for economic growth, built on a strong food processing and agro-manufacturing base.

To support the initiatives, she said the bank has employed loan officers throughout the country who will be closer to the farmers and enable easier access to the loan facilities.

She said NMB was optimistic of its performance despite the high level of nonperforming loans (NPLs) in the financial sector. She spoke of a liquidity squeeze, customer loan defaults and slack investments due to market uncertainties that affected the overall lending among banks. “But we are beginning to see a rise and believe with more government spending the sector will be stimulated. In the economy such as Tanzania’s where the private sector is small the government must be ready to spend.”

She hopes the high leanding rates will decline as banks tackle NPLs and enough cash pumped into economy to generate capital to lend.

NMB says the recent government move to fire 10,000 civil servants with fake certificates was also to blame for high level of NPLs. She said 90 per cent of those who were sent parking were owed by between eight and 10 banks. “Between eight and 10 banks including us, are owed by civil servants who lost their jobs due to fake certificates between Sh40-50 billion.”

“But we are in discussion with the government on how to handle the matter but it worth noting that this is a fraction of Sh1.5 trillion loan portfolio held by public servants.”

She also said the bank would use mobile phones and agents to train farmers on how to get loans and other services.

“We are also encouraging farmers to open accounts with us so as to be easier for them to enjoy loans from us,” said Ms Bussemaker.