TABD Managing Director Japhet Justine said the bank has embarked on a feasibility study to set out areas to work on in the coming year, including the chances of establishing industries to facilitate value addition like reviving ginneries in the cotton sector, along with sisal industries.
“As of November 2019 the bank had financially supported 1.6m famers developing 140 projects. The monies were provided to address value chain challenges in agriculture sub-sectors,” he said at a press conference in Dar es Salaam yesterday.
TADB also allocated 1bn/- to support the fishing industry, 10bn/- for livestock, 136bn/- for coffee and 60m/- directed to projects in forestry.
The bank intends to make history by ensuring value addition for major cash crops countrywide before the crops reach export markets, the director noted.
He said the idea that agriculture is not bankable has troubled farming for decades, with commercial banks virtually shutting their doors on the sector ostensibly on grounds that it is risky business.
He said TADB views the biggest challenge as that borrowers lack adequate project proposals. Some of them propose projects which don’t indicate how smallholder farmers will be incorporated directly or indirectly, he remarked.
TADB is working with various partners to assist farmers and livestock keepers to develop bankable proposals for financing by banks and other financial institutions, he further asserted.
In order to facilitate the delivery of balanced and inclusive financing of agriculture – and as part of TADB’s overall orientation – TADB has adopted the clustering and value chain financing approach, he said, which basically presumes group lending on the basis of collective proposals.
Working with the Ministry of Livestock and Fisheries, TADB has established a dedicated Private Sector Desk which – among other things – prepares and/or screens project proposals before they are submitted.
The bank is upbeat on coming changes in the legislation on cooperative unions to fully support SMEs. Currently there are various challenges including mismanagement and unpaid loans that are affecting cooperative unions, the director intoned.