Africa-Press – Tanzania. THE government has called upon lending institutions to increase loan portfolio to agriculture to at least 20 per cent in order to make the sector more vibrant and contribute to economic growth.
The Minister of State in the President’s Office (Investment), Prof Kitila Mkumbo, said in Dar es Salaam on Tuesday during the familiarization tour to the Tanzania Agriculture Development Bank (TADB) that, “We need to push bank loans channeled to agricultural sector financing to reach 20 per cent from the current 9 pc of total loans given out by financial institutions countrywide.”
This sector employs more than 70 per cent of the country’s labour force while contributing up to 27pc of the GDP.
It implies that apart from creating jobs, will be a lucrative deal for the country’s financial sector players,” he said.
The minister told TADB and other commercial banks in the country to motivate small scale farmers, manufacturers and processors to formalise their business for qualifying to access loans and create more jobs.
“Experience shows that people-centred development comes by enabling small scale producers into bigger ones. If nearly one million informal sectors get access to loans, it means that employment problem will be addressed as the economy will soar.”
The Managing Director of TADB Mr Japhet Justine told the minister that his bank has already started dealing with small scale processors and that youth with bankable ideas are welcomed.
He said that over the past five years, his bank has dished out nearly 250bn/- to the agricultural and manufacturing sectors, dealing with small scale farmers as well.
“TADB has given loans to cooperative societies to build capacity in purchasing crops; also sunflower producers have got access to our loans. We welcome youth with ideas, come in groups and access farms, TADB may intervene in ways like handing them tractors, seedlings and other farm input.
Mr Justine said that there was no doubt as agriculture has proven to be a highly bankable sector for all loans his bank had been issuing with non-performing loans remaining as low as below 5 per cent.
