TANZANIA AGRICULTURAL DEVELOPMENT BANK TO BE LAUNCHED

PRESS RELEASE

Dar es Salaam, July 10, 2015 - In efforts to bring about economic growth and poverty reduction in Tanzania, the Government has taken various steps aimed at accelerating transformation of the Agricultural sector, which employs more than 70% of the country's workforce and accounts for most of the raw materials for Tanzania's industries.

The potential and prospects found in the sector notwithstanding, agricultural growth is largely constrained by low productivity; lack of knowledge on modern practices and technologies; limited use of irrigation; lack of capital and access to credit; inadequate or lack of markets and remunerative prices; poor transport, storage, power and other infrastructure in rural areas; limited or no value addition; climate change and land degradation; among others. The limited financing available to agriculture in Tanzania is characterized by focus on commodities trading, high interest rates, short-term loan maturities, rigid repayment terms (i.e. no flexibility to accommodate the seasonal and/or cyclical nature of agriculture), etc.

At 3% per annum, Tanzania's population growth rate is one of the fastest in the world, and with more and more people moving into urban centers,the agricultural sector needs to grow much faster than the present 4-5% p.a. in order to both feed the growing population and generally lift the people from poverty. The potential of Tanzania's agriculture is buttressed by the country's endowment of untapped arable land, whereas most other countries have exhausted their land and have growing populations to feed and clothe.

The Government has therefore decided to establish the Tanzania Agricultural Development Bank (TADB) so as to enhance access to credit and related services, in order to facilitate transformation of the agricultural sector. TADB is now in the final stages of fulfilling Bank of Tanzania requirements for obtaining a permanent banking license, after which the bank will be formally launched. The launch details will be released soon.

The bank is structured to deliver short, medium and long-term lending through refinancing, co-financing, syndications and infrastructure financing to address financing gaps in the value chain of focus. The initial target value chains include cereals (maize and rice), agro-industrial crops (sugarcane), oil seeds (sunflower and sesame), horticulture (fruits and vegetables), cattle (diary and beef), poultry (indigenous chicken), fisheries (aquaculture) and forestry products (bee keeping).

The bank will use various innovative financing products such as warehouse receipt financing, out grower loan schemes based on contract farming, agri-input loans, wholesale/refinance facilities, group/joint-liability arrangements, collateral management, agriculture equipment financing for both mechanization and irrigation and other project investment facilities. The bank will also provide technical assistance services and act as agents in the management of third party funds directed to agricultural and rural development in the country.

For more information, please contact us;

Managing Director,
Tanzania Agricultural Development Bank,
3rd Floor Acacia Estate Building,
84 Kinondoni Road,
P.O. Box 63372,
Tel: +255 754 43 43 45,
Dar es Salaam,
www.tadb-kilimo.co.tz