Reacting to the Minerals minister’s budget speech, bankers have expressed their readiness to extend loans to small-scale miners following major policy and regulatory changes made on the way the sector operates
Dar es Salaam. Small-scale miners can now have ready access to loans and other forms of credit from local financial institutions, it was revealed yesterday.
Reacting to the Sh66.816 billion budget for the Minerals ministry for the 2021/22 financial as tabled by Minerals minister Dotto Biteko yesterday, bankers expressed readiness to increase their support to the sector.
CRDB Bank Plc chief executive officer Abdulmajid Nsekela said lenders in the past were specifically encouraged by the setting up of the mineral centres which have brought sanity in the sale of the Tanzania’s minerals.
Currently, there are about 30 operational trading hubs in the minerals-rich areas of Mwanza, Geita, Chunya, Arusha, Namanga, Singida Sekenke, Dar es Salaam, Kahama, and Shinyanga.
Others are in Ruvuma, Katavi, Tanga, Iringa, Manyara, Singida, Shinyanga, Dodoma, Kigoma, Tabora, Mbeya, Mara and Songwe in Son gwe Region.
These government-controlled selling and buying centres are part of the government’s drive to optimise mineral trading to benefit not just multinationals, but also small-scale miners, brokers and dealers.
The setting up of mineral centres seek to ensure that Tanzania gains more from its natural resources through providing greater transparency in the country’s mining industry, and to stop mineral smuggling and tax evasion.
According to Mr Nsekela, the government has also undertaken some efforts in mitigating some challenges that small scale miners used to face in the past.
“These motivated the miners because even small scale practitioners now have reliable places to sell their products and due to availability of experts in those markets, minerals are identified and distinguished at their specific values which enable banks to have trust on them,” said Mr Nsekela, who doubles as Tanzania Bankers Association (TBA) chairman.
He said his bank was specifically supporting both small scale buyers and mines so that they would improve their capital and build capacity to effectively undertake their activities.
He said the bank was also providing the link between sellers of mining equipment on one hand and miners on the other in such a way that the lender does not provide hard cash to them but it helps them acquire the necessary working tools, hence improve productivity.
NMB Bank’s acting internal auditor, Benedict Balagomwa, said yesterday that the bank has set aside Sh240 billion to support small scale miners after the governments’ ongoing improvement to tweak mining operations.
“In the past, the sector has been financed by overseas institutions but now the government has improved and made a conducive environment for local financial institutions to support the sector,” he said.
He welcomed small scale miners to his bank, saying it had a number of loan products, including asset financing for mining tools and their insurances through bancassurance due to their value.
For her part, Ms Happiness Kizigira - the NBC Bank’s Dodoma regional manager - said the bank used to finance the sector by supporting buyers and mineral suppliers but the budget speech has given them good directives by recognizing small scale miners through knowing how they undertake their businesses and types of licences issued to them.
“We now have confidence that entering the safe side and we will support the government in meeting citizen’s needs,” she said.