What you need to know: The AfDB, which has been supporting the growth of Tanzania’s MSMEs in various ways, including through its approval in 2016 of a $120 million line of credit (LOC) to the country, now wants to establish an entrepreneurial bank in Tanzania.
Dar es Salaam. The African Development Bank (AfDB) is considering establishing a development bank that will specifically cater for the funding needs of micro and small and medium enterprises (MSMEs) in Tanzania.
Monthly engagement meeting
Speaking in Dar es Salaam on Tuesday evening during the monthly engagement meeting of the CEO Roundtable of Tanzania (CEOrt), the AfDB country manager in Tanzania, Dr Patricia Laverley, said the envisaged Entrepreneurial Development Bank would be established under the AfDB’s Youth Entrepreneurship and Innovation Multi-Donor Trust Fund.
According to the Financial Sector Deepening Trust (FSDT), MSMEs contribute 27 percent of Tanzania’s GDP, and employ over 5.2 million people. However, growth of MSMEs in Tanzania has for many years been hampered by limited access to finance and effective use of financial products, largely because most MSMEs lack formal registration, collateral, credit history and tailored financial products.
Speaking at the meeting, whose theme was Driving African Economic Recovery from the Covid-19 Pandemic, Dr Laverley said the AfDB had commissioned KPMG to conduct a study on how the new bank could work, and who the beneficiaries would be.
“We are committed to supporting entrepreneurs with focus on women, micro-enterprises and SMEs to have access to finance as well as equipping them with skills development,” she said, adding, “Our targeted goal is to ensure that they have businesses that are sustainable.”
