In 20 years, SIDO coffers raise Tsh49bn for small firms

06Feb 2016
Beatrice Philemon
The Guardian
In 20 years, SIDO coffers raise Tsh49bn for small firms

COFFERS of the Small Industries Development Organisation (SIDO) have sourced loans reaching a total of Sh49bn to more than 70,000 small and medium entrepreneurs across the country in the past 20 years.

SIDO Director General Engineer Omar Bakari (front)

The loan program seeks to ensure that the majority of the population gets out of poverty through sustainable production projects, SIDO officials affirm.SIDO Director General Engineer Omar Bakari said the loans were disbursed from July 1994 to March 2015 through the National Entrepreneurship Development Fund (NEDF).“As result of these loans, more than 149,000 employment opportunities in the four economic sectors of agriculture, food processing, the livestock keeping sub-sector, fishing and the mining industry including their business sectors were enhanced,” he said.The loans were offered to SMEs in accordance with their needs and demands by acknowledging their contribution to the national economy and their business environment, the SIDO CEO maintained.During the same period, over Sh26bn worth of funds were issued to more than 39,000 female entrepreneurs, coming to around 52 per cent of total loans. Similarly about Sh23bn was disbursed to more than 34,000 male entrepreneurs, an equivalent of 45.81 per cent of total loans, he said.“Up to Sh33bn in loans were issued to more than 49,000 urban entrepreneurs with Sh15bn worth of loans being disbursed to 25,000 rural entrepreneurs in the same period,” he stated.Despite these disbursements, the demand for loans is still huge across the country as the funds have only covered a small portion of the population in need of the service, he elaborated.“I’m saying this because some clients’ demands for loans that is much bigger than the funds that we have,” he specified.He said small and medium entrepreneurs are keen to access loan facilities from SIDO, with current interest rates charged on loans standing at 18 per cent per annum for production projects and 22 per cent annually for service sector projects financed under NEDF.He called on small and medium entrepreneurs keen to access loan to run their business to visit SIDO offices in various zonal branches since the government has allocated funds through NEDF to help entrepreneurs access loan facilities.SIDO loan facilities are set out in group and individual loan categories, with group loans extended to solidarity groups.“For individual loans, applicants must have two guarantors and collateral not below 125 per cent of the value of the loan,” he said.With group loans, applicants must be ready to form groups and co-guarantee members within each group, he said, noting further that conditions and terms for loans do not vary much from one fund to the other.“The funds resemble each other in term of target groups (SMEs), purpose (business capital, for both working and investment),” he elaborated, pointing out that minimum and maximum loan sizes differ from one fund to another.NEDF was launched and started operations in 1994 by a parliamentary resolution aiming at providing loans to entrepreneurs throughout the country, appointing the Small Industries Development Organization (SIDO) as facilitator.The fund seeks to provide credits to small industries among small and medium enterprises to eradicate poverty through designing and implementation of projects in the main economic sectors, he added.