Africa-Press – Tanzania. EFFORTS to shift local farmers from small-scale farming to commercial farming has got new impetus, with Tanzania Agricultural Development Bank (TADB) now issuing tractors on loan at very low interest rates.
Under the initiative ‘Matrekta Loan’, the bank looks forward to empowering small and middle scale farmers to commercialise their farming through the aspect of financing for mechanisation.
It is in line with Agriculture Sector Development Programme II (ASDP II) which targets to increase productivity of targeted commodities within sustainable production systems and forge sustainable market linkages for competitive surplus commercialisation and value chain development.
The project has started for maize and yellow beans farmers at Narakauo village in Simanjiro District, where 19 modern tractors were loaned to individual farmers, according to TADB’s Acting Director of Credit and Business, Mr Jeremiah Mhada.
The bank runs the project in collaboration with its partners, including the LonAgro, which is the official dealer and service agent for several international machinery brands.
During an exclusive interview with the ‘Sunday News’ recently, Mr Mhada said the bank provides interest rates of between 12 to 15 per cent to farmers, which is the lowest in the market.
Yet, since the farm implements loaned are from the dealers who partner in the project, the partners also reduce costs of funding by buying back between one and four per cent of the interest rate, lowering further the interest rates to farmers.
“This collaboration benefits the farmer, apart from our interest rates being low, farmers would benefit more from our partners through what we call interest buyback, which also reduces costs of funding,” Mr Mhada explained.
Adding; “When a farmer takes a loan of a tractor, which is the product from our partners, they will benefit from reduction of our interest rates.”
He said the project has been designed to make the small and medium farmers have access to funding, noting that it focuses on encouraging women and youth to engage in agriculture through integrated value chain financing mode.
“We will roll out this project in all our five zones, Eastern Zone, Lake Zone, western zone, Southern Highlands Zone and the Central Zone,” he revealed.
Elaborating on 19 beneficiaries in Simanjiro, Mr Mhada said the bank has acquired 16,000 hectares for those farmers to cultivate, whereby 10,000 hectares are for maize and 6000 hectares for yellow beans.
The bank has also deployed a project administrator to manage the farmers, link them with extension officers and market for their produce.
“We want production of maize and beans to increase, which will result in increased income to farmers,” he said.
One of the beneficiaries, Mr Elia Rarein said one of the maize and beans farmer at Narakauo village, described the loan of a tractor as a big saviour.
Mr Rarein has taken a loan of 82 horse-power tractor alongside other equipment, such as planter which is worth 157m/- altogether.
Previously, he was cultivating only one or two hectares per day by using his old tractor, but after getting a loan of the modern tractor from TADB, he can now cultivate up to 20 hectares in a day.
“This gives me a picture of a bumper harvest in the next year because I look forward to producing four times the current production,” he stated.
Currently, Mr Rarein harvests 5000 bags of maize and 300 bags of yellow beans, so he is optimistic that the next harvest will bring him 20,000 bags of maize and 1200 bags of beans.
