Tanzania: Pan-African insurer to launch new cover against SME lending risks

Mar 27, 2014

A pan-African insurance company is to launch a product in Tanzania that would cover banks against the risk of non-payment for loans granted to small and medium-sized enterprises (SMEs).

A pan-African insurance company is to launch a product in Tanzania that would cover banks against the risk of non-payment for loans granted to small and medium-sized enterprises (SMEs).

The African Trade Insurance Agency (ATI) said in a statement that SMEs often lack the necessary collateral and experience that would normally be required to secure a traditional bank loan, Tanzania Daily News report.

The new product would cover banks against the risk of non-payment within the sector and thus help boost
SMEs'
access to finance
and the economy in general.

SMEs are considered by experts as critical for the economic and social development of emerging markets. They play a major role in creating jobs and generating income for low earners and contribute to the development of a dynamic private sector.

In Tanzania, they are estimated to contribute to about 30 per cent of GDP and are the second
largest
employer after the agricultural sector, according to the Tanzania Investment Centre.ADNFCR-2976-ID-801707069-ADNFCR