Dar es Salaam, Monday 13th September 2021. Equity Bank (T) has signed a Memorandum of Understanding with the Private Agricultural Sector Support (PASS) Trust to allow the Bank to disburse loans to agribusinesses in Tanzania to build capacities and increase productivity.
The MoU, which was signed today in Dar es Salaam, will see agribusiness entrepreneurs in Tanzania that include Individuals, Micro, Small, and Medium Enterprises (MSMEs), large enterprises, Micro Finance Institutions (MFIs), and associations in Tanzania receive low-cost loans from Equity bank through the PASS Trust Credit Guarantee Scheme.
Agriculture is an important sector for Tanzania’s economy, with over 75% of the working population r relying mainly on the industry. Apart from ensuring the country’s food security, Agriculture also contributes up to 27% of the country’s GDP and 30% foreign exchange earnings.
Speaking at the signing ceremony, Equity Bank (T) Managing Director Robert Kiboti said: “Agriculture is indeed the backbone of our economy. At Equity Bank, agriculture is our priority area, and we are targeting agriculture loans to read at 30% of our general loan portfolio. We are delighted to join forces with PASS Trust to facilitate access to agricultural financing by agribusiness entrepreneurs in Tanzania. Equity Bank’s mission is to ensure that a wide range of agri-SMEs has access to financial solutions at all value chain stages, from production to the market places. On the other hand, PASS Trust’s objective is to facilitate access to financial and business development services for agribusiness entrepreneurs in Tanzania. These combined missions will undoubtedly bring out the best results as far as access to finance for agribusinesses is concerned. It is, therefore, crucial for us to continue providing financial platforms that will see more agri-SMEs access affordable financial support that will ultimately contribute to the transformation of agriculture, the economy, and lives of Tanzanians,” noted the MD.
PASS Managing Director, Yohane Kaduma, hailed the enhanced partnership between PASS Trust and Equity bank, terming it an excellent opportunity for agribusiness entrepreneurs in Tanzania. The entry of Equity bank into PASS’ pool of collaborating banks brings to 14 the number of banks that PASS Trust is working within, enabling access to agricultural credit through the PASS Guarantee scheme.
“And we invite even more banks to join this pool of PASS’ collaborating banks so that many more Tanzanians engaged in agribusiness can be able to access credit and increase production.” Said Mr. Kaduma, adding that PASS was excited to continue working as a bridge and catalyst in spearheading access to affordable loans to entrepreneurs.
In this operating agreement with Equity bank, PASS will provide between 20-60% credit guarantee to the Bank to topping up inadequate collateral to enable clients to get financing. Women-led agricultural projects will benefit with up to an 80% PASS credit guarantee. Over 1.7 million agribusiness entrepreneurs have benefited from the PASS credit guarantee scheme since it was started in the year 2000.
Since 2017, the Trust supported the total value of loans amounting to TZS 6.7 billion with a Credit guarantee Commitment of TZS 2.6 billion under the agricultural value chain. The total credit guarantee fund deposited by PASS Trust at Equity bank to benefit agricultural entrepreneurs is USD 1.0 Million, equivalent to TZS 2.3 billion.