Clinton Fund, TADB ink 1.15bn/-for 29 AMCOs

22Jul 2021
By Guardian Reporter
The Guardian
Clinton Fund, TADB ink 1.15bn/-for 29 AMCOs

THE Tanzania Agricultural Development Bank (TADB) has entered into a strategic partnership with the Clinton Development Initiative (CDI), an initiative of the Clinton Foundation, that will allow the agro-sector institution to disburse up-to $500,000 (1.15bn/-) to unlock the soybean value-chain ...

in Iringa Region.

A Memorandum of Understanding (MoU) recently signed between the two parties provides that the partnership aims at enhancing financial accessibility to 29 Agriculture Marketing Cooperatives (AMCOs), that will impact 2,900 farmers supported by the foundation. They are engaged in the production and marketing of soybeans, and support extends for a period of three years.

TADB Managing Director Japhet Justine said that TADB was excited about this partnership, as it is the first intervention the bank is undertaking in the soybeans value-chain. There is greater demand for soya as a fortifier in human foods and there is an active cadre of small-to-medium-scale entrepreneurial processors, mostly women, servicing this requirement.

Similarly, demand for soya as an ingredient in animal feeds, especially for poultry is rising, he stated.

The MoU sets up a loan facility to help farmer leaders, village community banks (VICOBA) and AMCOs to access basic seeds to multiply into quality declared seed (QDS) and certified seeds for producing soybean grains. AMCOs will also get aggregation loans to build capacity in early purchase of soybeans and post-harvest handling linkage to markets, he elaborated.

CDI country director Monsiapile Kajimbwa said that under the partnership, CDI will disburse credit for financial training and agribusiness development support as a catalytic investment for TADB. The bank will disburse the1.15bn/- credit in different phases during the partnership period, he affirmed.

This investment will help soybean small-scale producers put more money into their pockets, as CDI financing for cooperatives makes them better positioned to serve their members. “For several years, we have seen success with input and output loans through our cooperatives. It is now timely to scale up the model in the region,” the director asserted.

Tumaini Lupola, general manager for the Iringa Farmers’ Cooperative Union (IFCU) said that the CDI intervention is a grand opportunity for IFCU to support cooperatives to develop structured marketing of agricultural commodities, especially soybeans, benefiting their members and farmers.

“The output loan will specifically enable AMCOs to undertake early purchase from their members, aggregate and supply to off-takers in higher quantity and better quality in a more consistent manner,” he specified.

IFCU involvement is twofold, benefitting directly from the loan and being an administrator of the AMCOs, he remarked.

Production of soybeans in Tanzania has increased progressively in the past 10 years, from producing 3,100 metric tonnes in 2009 to 22,953 metric tonnes in 2019. However, productivity is still low globally, so with the integrated value-chain financing model, TADB is certain of increased production of soybeans in Iringa.”We want this partnership to upscale more production to increase exports.,” the general manager underlined.

Commending the partnership, Angelique Kitime, a farmer leader at Mgama village in Kilolo District said that the partnership will be salutary for farmers.

“Having access to certified quality seeds that are reliable and at affordable prices will enable the farmers to lower production costs and make enhance incomes,” she stated.

The country directed explained that at the end of the three-year project, TADB and CDI expect members of the AMCOs to have increased their soybean production capacity; realize a stronger farmer-community managed soybean supply chain.
They will have improved their capacity to carry out early grain purchasing from their members as well as strengthen their skills and development as they engage in regional soybean markets, he further noted.

The TADB CEO said that the bank’s intervention in the soybean value-chain is a continuation of its substantial work in Iringa’s agro-based financial operations. As of this month, TADB had already disbursed a total of 5.68bn/- through the smallholder credit guarantee scheme in partnership with commercial banks to support value-chains such as tea, paddy, poultry, maize, cereals, avocado, pyrethrum, horticulture, dairy and agri-inputs.

Of this amount 2.74bn/- was directly loaned out by the bank and 2.94bn/- loaned to AMCOs in Iringa region, he stated.
In two seasons, from 2019 to 2021, CDI successfully operationalised the input loan with 56 VICOBA members, an output loan arrangement with three AMCOS in Iringa.

It also mobilized 106 farmer leaders to become certified and produce quality declared seeds (QDS) for other farmers in their communities.

CDI is actively working with nearly 80,000 smallholder farmers across Tanzania, Malawi and Rwanda, he added.