SMEs TO BENEFIT FROM NEW CREDIT GUARANTEE SCHEME

TIB Development Bank Managing Director, Peter Noni.

The TIB Development Bank and the National Economic Empowerment Council (NEEC) yesterday inked a deal that seeks to see the two government-owned institutions collaborating in the endeavour to nurture enterprise growth.

The ten-year-old NEEC was established primarily for the purpose of facilitating the designing, planning, supervising, monitoring as well as evaluation and coordination of all activities pertaining to economic empowerment of Tanzanians.

It is therefore extending concessionary loans and providing credit guarantees to borrowers in Tanzania Mainland, among other issues. And in yesterday’s deal, TIB will be administering NEEC’s Credit Guarantee Scheme under the National Economic Empowerment Fund.

TIB managing director Peter Noni said the scheme seeks to promote and support young graduate entrepreneurs, small and medium enterprises (SMEs) and cooperatives which have a significant role in the economy.

“The support will be done through the creation of an enabling environment for expanding and facilitating access to financing requirements,” he said.

Borrowers who meet the criteria will access guarantees through the fund.

The scheme shall target the issuance of guarantees in respect to credit facilities granted by TIB for manufacturing, agriculture, trading and service provision projects .

that are geared to promote the growth of the economy.

Beneficiaries in the SME category will be able to get a maximum credit amounting to Sh200 million while entrepreneurs in the young graduate category will get up to Sh50 million.

Apart from being legally registered by all relevant bodies, a Tanzanian-owned SME will also be required to be one that is already involved in farming, trading, processing, stocking, fishing, value addition and transportation activities. “They must also be ready to offer any enforceable collateral including their personal guarantee, with the condition of allowing assignment of such collaterals to the Scheme acceptable by TIB,” the bank said in a statement.

The guarantee coverage for SME loans will have a duration not exceeding 36 months while the cover will be 50 per cent of the outstanding loan.

The Citizen