Sido’s small and medium size enterprises Credit Guarantee Scheme’s Program Officer, Ismail Tego said the agro-processors received between 10m/- and 50m/- loan packages.
Tego said the objective of the scheme is to promote and support SMEs which play a significant role in the economy because they create jobs but also add value to commodities hence need to access financing from banks with less stringent conditions.
“The loans are disbursed as per the applicant’s needs but also ability to repay timely,” said Tego who further noted that the SME Credit Guarantee Scheme is currently implemented in 16 regions across the country.
He said the beneficiary regions were selected based on the potential of agro processing SMEs, presence of other related program implemented by Sido such as ‘Muunganisho Ujasiliamali Vijini’ (MUVI),One District One Product and Kaizen Cluster Development Program.
He called on SMEs in all areas across the country where Sido has offices to visit them and secure the concessional loans because procedures have been improved while guarantee is given by the organization.
The Program Officer also said interest rates have been reduced from a prevailing market rate of between 20 and 18 to only 17 percent.
“Sido decided to embark on this program after discovering that access to finance has been one of the major challenges facing SMEs as the majority have no collateral,” he added.
The SME Credit Guarantee Scheme is backed by funding from Japanese government’s Agriculture Food Aid Counterpart Fund program.
In January 2015, Sido on behalf of Ministry of Industries and Trade signed the grant agreement with Japan’s Food Aid Counterpart Fund.
Sido then signed another agreement with CRDB Bank to extended loans to the program beneficiaries through a special loans term that fits the target group’s capacity to absorb and repay the loans.
Under the deal, CRDB agreed to extend loans to Sido guaranteed SMEs of up to 2bn/- in total while the organization deposited 1bn/- cash as guarantee funds to cover 50 percent of any defaults if they occurred.