Prime Minister Mizengo Pinda yesterday urged commercial banks in the country to put their trust in small holder farmers by offering them affordable loans to encourage them to invest more in the sector.
The Premier also challenged banks to expand their services in rural areas.
He made the remarks in Dar es Salaam in his speech that was read on his behalf by the Minister for Defense and National Service, Shamsi Vuai Nahodha, at the opening of a two-day workshop for African Rural and Agricultural Credit Association (AFRACA).
“There is a need for financial institutions to change their views of the small holder farmers because once provided with relevant information, they can receive credit facilities and repay smoothly,” he said.
Pinda said the agricultural sector attracts a small number of investors due to various reasons such as limited access to credit facilities because most of them lack collaterals.
He advised the banks to establish links with Savings and Credit Cooperative Societies (Saccos) to reduce the cost of reaching out to remote areas.
The premier said that agriculture employs approximately 80 per cent of the country’s labour force, most of them living in rural areas, and contributes more than 75 per cent of total export earnings.
Pinda urged workshop participants to come up with resolutions that would help policy makers, regulators and practitioners to embrace financial innovations potential in order to extend financial access in rural areas. Meanwhile, AFRACA Chairman and Dar es Salaam Community Bank (DCB) Chief Executive Officer Edmund Mkwawa said the workshop aims at discussing developmental issues related to interventions that will help expand the availability of rural fiancé and its contribution to economic growth.
Mkwawa said that Tanzania has started to promote rural agriculture and microfinance through the national strategy for enhancing financial services in rural areas.