Tanzania: $23m Govt, AfDB Loan to Benefit Small Scale Traders

Nov 2010
Dar es Salaam, Tanzania , November, 01 2010 - Some 820,000 small entrepreneurs in Tanzania are set to benefit from a $23 million loan facility and business training scheme. The Small Entrepreneurs Loan Facility (Self) is a government project in collaboration with the African Development Bank.

Permanent Secretary in the Ministry of Finance and Economic Affairs, Ramadhan Khijjah told The EastAfrican in Dar es Salaam last week that the facility is part of a $30 million project, in which $6.83 million was disbursed to 70,000 people in its first phase.

“The venture will replicate the unique model of combining credit with capacity building,” he said.

The project is expected to contribute to socio-economic development and increase income levels, leading to improved living standards.

It will also provide training to 1,600 officers in micro credit institutions to strengthen financial service delivery.

The country will be divided into financial hubs across several regions in order to speed up loan applications, ensure close follow up and enhance repayment while containing operation cost.

Oswald Leo, the social sector specialist at AfDB, said the urban-rural disparity in accessing financial services is significant, with only 8.3 per cent of rural dwellers formally included in the financial services.

“The statistics point to serious challenges in enhancing financial intermediation especially in rural areas,” he said.

In the second phase of the Self project, more than 1.23 million people half of whom are women will be employed in a bid to strengthen financial service delivery.

Raymond Besonlo, a consultant with AfDB, said the banks aims to reduce the ratio of those living below the poverty line from 33 per cent to 19 per cent by 2015.

Self was founded almost 10 years ago with the purpose of providing loans to microfinance institutions such as NGOs, Saccos and community banks, that lend to rural and urban under-served entrepreneurs.

Poverty reduction efforts in Tanzania are guided by both short and long-term policy frameworks and strategies, which include the Tanzania Development Vision 2025 (for mainland) and Vision 2020 (for Zanzibar), National Poverty Eradication Strategy, Poverty Reduction Strategy Paper (mainland) andZanzibar Poverty Reduction Plan, various sectoral policies and strategies as well as the UN MDGs.

Source : The East African

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