Government, NMB Bank in Sh18.5 billion loan deal to empower MSMEs

What you need to know:

  • Gwajima, emphasises the potential for economic growth and improved livelihoods through prudent investment of these funds

Dar es Salaam. Micro, Small and Medium Entrepreneurs (MSMEs) will receive Sh18.5 billion in the government’s empowerment loans during the coming two years.

The money will be disbursed on favourable-term loans from NMB Bank through a two-year agreement that was signed in Dar es Salaam yesterday.

During the agreement signing ceremony, NMB Bank was represented by its CEO, Ms Ruth Zaipuna, while the government was represented by the Permanent Secretary in the Ministry of Community Development, Gender, Children and Special Groups, Dr Seif Abdallah Shekalaghe.

The Minister for Community Development, Gender, Children and Special Groups, Dr Dorothy Gwajima, witnessed the event.

“The Sh18.5 billion is a significant amount to start with, but this amount will increase because the government’s goal is to make these loans sustainable to reach more people,” Dr Gwajima said before the signing of the two-year agreement yesterday.

She was of the view that, if invested prudently, the funds could have a significant developmental impact by stimulating economic growth and improving household incomes.

The loans, Dr Gwajima said, were part of the government’s new initiative to empower specific groups and ensure that only the intended beneficiaries receive assistance.

In his remarks, Dr Shekalaghe said the decision to pick NMB as the lender for funds concludes their ministry’s process of seeking a partner bank for various operational and developmental issues.

He said the funds will be disbursed on an annual basis and will follow the government’s new approach and procedures for financing income-generating projects for special groups.

“The registration of eligible beneficiaries has already begun, with special IDs being issued to entrepreneurs,” he said.

In her remarks, the NMB Bank CEO, Ms Zaipuna, said the agreement was a testament to the bank’s substantial efforts to support the Sixth Phase Government’s endeavours to improve the business environment for all entrepreneurs in the country, including small ones. “We received awards this year, including Best SME Bank in Tanzania and Best SME Financier for the year 2024, which qualifies it to better manage the soft loan facility,” Ms Zaipuna said, stressing that the funds were in safe hands.

The bank, she said, has disbursed a total of 129,540 loans, valued at Sh2.03 trillion, to entrepreneurs from 2020 to 2023.

She said the agreement with the ministry would expand the bank’s reach to more small-scale entrepreneurs in the country.