PASS Trust celebrates 20 years of support to the agricultural sector in Tanzania

The Private Agricultural Sector Support (PASS) Trust was established by the governments of Tanzania and Denmark in November 2000 and became operational in 2001 as a project under the Ministry of Agriculture and Livestock, with the main purpose of stimulating investments and growth in the private sector commercial agriculture and related sectors through access to finance.

In 2007 PASS was registered as an autonomous body corporate under the Trustees Incorporation Act, 2002 and is taxed as a charitable organization. PASS’ mission is to facilitate access to financial and business development services for the agribusiness entrepreneurs in Tanzania.

Since inception in the year 2000, PASS has continued to contribute towards Tanzania’s agricultural Finance landscape, by assisting agricultural entrepreneurs to feasibly and profitably borrow from commercial financial institutions, for purposes of improving their Agri businesses.

In reaching out to beneficiaries in the entire agricultural value chain spread across Tanzania, PASS offers a partial cred-it guarantee cover to collaborating banks as a means of topping up inadequate collateral to enable clients get financing. PASS provides banks with guarantee ranging from 20-60% (Up to 80% for women) of the loan amount. Beneficiaries can be individuals (SMEs or farmers) or farmer groups.

PASS also offers Business Development services such as feasibility studies, supports development of business plans and conducts training or organisation of farmer groups. Since inception in the year 2000 until March 2020 (2000 -31st March 2020), a total of 36,007 projects worth Sh 916.4 Billion have been approved and guaranteed by PASS, with at least 1,196,891 agribusiness entrepreneurs benefiting from this guarantee. Out of these numbers, more than 45% are women. The beneficiaries are drawn from farmers groups, SACCOS, cooperatives, farmers’ associations, and companies, individuals and women groups involved in agribusiness activities.

PASS Beneficiaries

PASS beneficiaries have been from various sub sectors that include livestock, crop production, processing, crop trading, mechanisation, support to irrigation infra-structures, transportation of agricultural commodities, bee keeping, fish farming as well as inputs trading.

The beneficiaries include any individual, Association, cooperatives as well as companies linked to the agricultural sector in the various sub sectors.

PASS achievements

Since inception in the year 2000 until March 2020 (2000 –31st March 2020), a total of 36,007 projects worth Sh916.4 Billion have been approved and guaranteed by PASS, with at least 1,196,891 agribusiness entrepreneurs benefiting from this guarantee. Out of these numbers, more than 45% are women.

In the year 2019, the total credit accommodation granted to agribusiness sector under PASS Guarantee Scheme was Sh129.7 Billion in 14 banks which benefited a total of 226,689 beneficiaries spread across Tanzania.

An estimated 2.5Million jobs have also been created as a result of these support, thus improving people’s lives. In recognition of these efforts, PASS has been recognized in various forums and awarded for its contribution in the country’s economic empowerment and development. PASS has emerged winners in the country’s annual Nanenane exhibitions, as one of the best institutions supporting the country’s development of the agricultural sector through employment creation and poverty reduction.

The Agribusiness Innovation Centre (AIC) Youth agribusiness incubators

PASS has established AIC youth incubators that provide the youth with an opportunity to start, operate and own an agribusiness. The agribusinesses are in production and processing of horticulture, other food crops, livestock, fisheries and small agro-processing.

Working with Sokoine University of Agriculture (SUA) in Morogoro and Tanzania Livestock Research Institute (TALIRI) at Kongwa, so far, 80 youth have been incubated in the last two years in horticulture (vegetables) production business using screen houses and goat fattening business utilizing feedlot and very limited pasture. Of these, 50 youths are now in process to relocate their businesses to their own location. This year, 160 youth are in incubation. The agribusiness incubation is for a one year period.

During incubation, the youth are facilitated with a complete start-up agribusiness, which the youth operate and manage under close supervision from AIC. After the incubation period, the successful youth (i.e. those who show profit after one year), are supported to relocate their business to their own premises/area and to continue doing the business.

Those youth who intend to further expand their business during and after relocation, for example, in small agro-processing or even small agro manufacturing, they are linked to commercial banks for obtaining suitable loans. For this purpose, PASS has entered specific agreements with TADB and CRDB who have prepared a special financing product for youth with very friendly term and conditions.

Plans are underway to establish more incubators in different regions of the country with the aim to empower at least 500 youths every year to start and manage their own agribusiness in production, processing and manufacturing using new and sustainable technologies.\

PASS Leasing Company LTD

In order to offer more support to the Agribusiness Sector in the country, PASS Trust will soon launch an independent company The PASS Leasing Company, whose aim is to support the sector through provision of competitively priced lease financing, for purposes of ensuring that agribusinesses in the country reach their maximum potential.

Through the new Leasing Company, Small and Medium Entrepreneurs and smallholder farmers who have previously been marginalized or underserved will now have an opportunity to access and own agro-equipment more easily, thus cushioning them against traditional collateral requirements which are usually imposed on borrowers. The Leasing Company has already been granted a provisional license to carry out the services by the Bank of Tanzania (BoT).

The Agribusiness Magazine for the Agribusiness Sector

PASS Trust launched the Agribusiness magazine in February 2020 with the main objective of providing a platform where agribusiness stakeholders can share information, best practices, and opportunities and learn from each other for purposes of stimulating growth and development of the sector.

The biannual and free English magazine is also expected to contribute broadly to the knowledge base on and promotion of agribusiness entrepreneurship in Tanzania, through well researched and professionally developed articles. It targets stakeholders in the agribusiness industry.

Global recognition

Besides being recognised and feted locally, PASS Credit Guarantee model has been recognised internationally as a unique model that is propelling the growth of the agricultural sector in Tanzania.

In one of the International publications undertaken by SAFIN-A finance and Investment network, the PASS Credit Guarantee model has been termed as one of its kind in the African region that should be emulated for faster economic growth and development. The Trust has been feted for its contribution towards Tanzania’s agricultural development. PASS Credit Guarantee model has trended internationally as unique.