Pass, Sweden ink Sh45bn guarantee agreement

Dar es Salaam. The Private Agricultural Sector Support Trust (Pass) and the Swedish government have signed a $20 million (about Sh45 billion) Guarantee Agreement to support agricultural activities in the country.

The seven-year partnership will contribute to increased business development support and lending through PASS guarantees to Micro, Small and Medium Sized Enterprises (MSMEs) in the country's agricultural sector.

The Pass managing director, Nicomed Bohay and Chargé d’affaires in the Swedish Embassy in Dar es Salaam Ulf Källstig, signed the deal at the embassy on Tuesday afternoon.

"It's my sincere conviction that the $20 million agreement we have just signed will amplify our endeavors to lift Tanzanian peasants out of poverty," Mr Bohay said in his post-signing speech.

He appreciated the support as critical to Tanzania's efforts to reduce poverty and develop small agribusinesses for industrialisation and economic development.

"Pass has always aspired to extend credit guarantees to as many beneficiaries as possible. The entry of Sweden as our latest partner not only boosts our capacity to serve more entrepreneurs in the agricultural sector, but also reassures us that out there, there is a reserve of potential allies, only waiting to get inspired by the work we do," said Mr Nicomed.

Mr Källstig said through assisting in turning the unbankable into bankable, the Pass-Swedish guarantees will lower the risk of both banks and clients.

He said, “Sweden views Pass as a highly relevant partner in its role as an intermediary who understands both the banks and the agribusinesses...together we contribute to unleashing the potential of Tanzanian agribusinesses, and as such to poverty reduction and economic development."

The collaboration with Sweden will help in expanding Pass's guarantee volume and coverage, with more small holder farmers and agribusinesses enabled to expand their businesses, increase productivity, create more jobs and increase incomes.

Pass Board of Trustees Chairman, Prof Andrew Temu described the deal as a big boost to PASS struggles to emancipate Tanzania's peasants, especially in the rural areas.

He said, "We, in Pass, will work hard to justify this generosity of Swedish taxpayers to Tanzanians."

Before the signing Pass and Swedish delegation had in the morning visited one of the guarantee beneficiaries, Ms Eugenia Mkoko, at Ruvu Irrigation Scheme in Coast region.

Ms Mkoko thanked Pass for the credit guarantee, which she said has liberated her from poverty. She advised other unemployed and particularly widows to farm.

“I'm very grateful to Pass, which has rescued me from poverty. Since I started working with Pass I have continually expanded my acreages. I welcome other unemployed to join us for farming," Ms Mkoko, a widow since 1999, said at her paddy farm.

Mr Källstig expressed optimism that under the signed deal, more Eugenias will be created.