By Veneranda Sumila
Dar es Salaam. Small and medium enterprises in the country would have more financing opportunities following the signing of a $10 million (Sh16bn) loan agreement between Exim Bank and FMO, a Dutch development bank.

The loan, to be used to meet long-term credit needs of SMEs and enterprises in the agriculture sector, will be payable within seven years at an interest rate of six per cent according to Exim Bank chairman Yogesh Manek.

Mr Manek said the Bank plans to offer more long-term loans to its clients this year to meet growing demands of the services in the country as the economy expands.

The FMO director of Financial Institutions, Mr Ruurd Brouwer, said his institution has decided to offer the loan to Exim as part of efforts to support the growth of entrepreneurship in the country.

“Entrepreneurship is key in creating sustainable economic growth and improving people’s quality of life.
Funding SMEs and agriculture based enterprises will have a long term impact on the country’s economic development,” he said.

He added that a strong private sector leads to economic and social development; empowering people to employ their skills productively can enhance the quality of their lives.

FMO focuses on four sectors that have high development impact: financial institutions, energy, housing and agribusiness. The FMO has already invested about 1.5 billion euro in 20 African countries.

Many SMEs in Tanzania suffer from lack of adequate capital. The agreement between the two banks would thus provide them with a boost.

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