Work on the establishment of the long awaited agricultural bank is now at final stage, Agriculture Food Security and Cooperatives ministry has said.
Speaking recently to representatives of small scale farmers’ network (Mviwata) in Dar es Salaam, Acting Permanent Secretary in the ministry Emmanuel Achayo, said preparations are at an advanced stage and the bank would start operations later next year.
Achayo was responding to a question posed by Elias Kawea, a farmer from Dodoma Region, who had wanted to know the latest stage in the setting up of the bank.
“What I understand now is that preparations for the establishment of the bank are at final stage, you will be notified more later,” he briefly told the farmers.
Kawea noted that the government was taking too long to set up the bank.
"We the small scale farmers will continue to face difficulties when accessing loans from commercial banks, which tend to complicate procedures before they issue the loans," he said.
He said as farmers they still need to be convinced that commercial banks can offer solutions to agricultural problems.
“We really need banks that will offer us long-term loans to procure modern farming equipment,” he said.
Habib Simbamkuti urged the government to increase its funding to the sector saying the bank would help improve agriculture.
“The government should in the coming budget increase its funding at least to ten percent to the agricultural sector,” he said.
Notable changes have been witnessed in other countries in Africa which have already increased their budget in agriculture, he said.
Experts however say the number of commercial banks that offer loans to farmers is on the increase, but see the trend as not being sustainable.
In early September last year, the Bank of Tanzania (BoT) invited bidders to express interest for carrying out feasibility study on the establishment of an agricultural development bank in Tanzania.
According to an agriculture working group under the Tanzania National Business Council (TNBC), an initial capital of 660bn/- would be required to have the financial institution kick started.
It is expected that the private sector might be co-opted to provide additional funding to the project through government guaranteed long-term bonds.
The growth and development shortcomings of the agricultural sector in Tanzania are attributed to lack of cheap and long-term loans to peasants that make 80 per cent of the country's population.