Tanzania: New Agriculture Bank Seen As Farmers' Salvation
The Central Bank is on the final stages of establishing the Tanzania Agriculture Development Bank, a new institution that should facilitate farmers' access to finance.The Central Bank is on the final stages of establishing the Tanzania Agriculture Development Bank, a new institution that should facilitate farmers' access to finance.
According to the Bank of Tanzania, most existing commercial banks are established in cities and are not servicing farmers in rural areas. Moreover, farmers suffer from the perception that agriculture is not a viable investment opportunity and find it difficult to access loans from commercial banks and even microfinance institutions.
The new institution will be fully dedicated to agriculture. Its licence application should be granted within 90 days, if all procedures were followed properly. A board of directors is already in place, which is overseeing the establishment of the bank.
Statistics show that only three per cent of agricultural households have access to credit and only around 10 per cent of total credit goes to agricultural investment. This situation is explained by both the
tough conditions and high interest rates charged by commercial banks. It is hoped that the establishment of the dedicated agriculture bank will help remedy this situation.