Bankers challenged to fund growth of SMEs

Dar es Salaam. The government has challenged banks and other financial institutions to finance potential economic sectors including tourism which was hit by the outbreak of Covid-19.

Other economic activities mentioned include the small and medium-sized enterprises, agriculture as well as the creation of industries.

The call was made yesterday at a function to inaugurate the headquarters of NCBA Bank - the new bank formed after merging NIC Bank and the Commercial Bank of Africa.

“There are sectors like tourism which is an important economic activity that needs assistance to recover after being affected by Covid-19. It still needs more financing to return to normal,” said the Bank of Tanzania’s (BoT) financial institutions supervision manager Nassoro Omar who attended the event on behalf of the deputy governor.

“We have taken some monetary measures to cushion the financial sector from effects of the Covid-19 pandemic, and we believe now banks like NCBA are in the position to support the affected sectors and stimulate economic growth,” he observed.

Tourism was Tanzania’s leading foreign exchange earner but recently it was overtaken by gold which investors prefer as safe haven in the wake of the pandemic.

Tourism earnings slowed to $2.1 billion in the year to June 30, 2020 from $2.5 previously while gold increased to $2.6 billion from $1.7 billion in the same period. The event was graced by Finance and Planning deputy minister Ashatu Kijaji who also asked the lenders to finance SMEs, industrialization and agriculture.

“Indeed, we are all aware that the development of SMEs is central to economic growth because they not only provide jobs to the masses, they are also a key contributors to the country’s GDP and tax revenues,” said Dr Kijaji who also promised to continue creating better environment for the banking sector to grow.

She said a strong financial sector was needed to support the industrialization drive as by financing key sectors like infrastructure development and other productive sectors such as the agricultural sector with its value chain.

NCBA chief executive officer Margaret Karume thanked the government of supervision of the financial sector and promise to finance economic development.

“Our aim is to support growth in important economic activities such as SMEs, informal sectors, infrastructure and agriculture,” she said.