NCBA Bank Tanzania and the Tanzania Agricultural Development Bank (TADB) have partnered to expand financing for businesses across the agricultural value chain. The partnership aims to increase investment in production, mechanization, processing, storage, and distribution. This collaboration is expected to enhance the commercial bank's capacity to finance agricultural businesses at different stages of the value chain.
Under the agreement, TADB has provided NCBA with a Sh10 billion term facility and a credit guarantee arrangement to support lending to eligible corporate, small and medium-sized enterprise (SME), and retail customers. This facility will enable NCBA to support agricultural SMEs seeking to acquire machinery, increase production capacity, or improve storage. Processors and larger agribusinesses can also use the financing to expand operations and invest in different parts of the value chain.
Speaking during the signing ceremony in Dar es Salaam, NCBA Bank Tanzania chief executive officer Alex Mziray emphasized the importance of extending agricultural financing beyond farms to include businesses that support production and distribution. He stated that the partnership reflects the bank's "Banking on Belief – Empowering Ambitions" philosophy, which focuses on understanding customers' business objectives and developing financial solutions to support their growth.
TADB managing director Frank Nyabundege highlighted the significance of partnerships with commercial banks in widening access to agricultural finance. By combining the capabilities of institutions with different roles in the financial system, they can broaden the channels through which agricultural businesses can access finance. The credit guarantee component is intended to provide additional risk-sharing support as NCBA expands lending to eligible agricultural businesses.
The partnership is linked to NCBA's Ndoto Zako, Hatua Zetu campaign, which seeks to support customers in pursuing their business ambitions. Mziray explained that behind every agricultural enterprise is an ambition, whether it be a farmer looking to mechanize, an SME wanting to increase production, or a processor looking to access a new market. The bank's role is to understand that ambition and identify how it can help the customer take the next step.
Nyabundege stated that the long-term objective is to translate increased access to finance into productive investment and stronger agricultural enterprises. The impact they want to see is businesses accessing financing, investing productively, expanding their operations, and strengthening their contribution to the agricultural value chain. This partnership is expected to have a positive impact on Tanzania's agricultural sector.
The collaboration between NCBA and TADB is a significant step towards increasing access to finance for agricultural businesses in Tanzania. With the Sh10 billion term facility and credit guarantee arrangement, NCBA can now provide more financing options to businesses across the agricultural value chain. This partnership has the potential to boost productivity, expand operations, and increase the sector's contribution to the country's economy.
Key points
- NCBA Bank Tanzania and TADB partner to expand financing for agricultural businesses
- The partnership includes a Sh10 billion term facility and a credit guarantee arrangement
- The goal is to increase access to finance for businesses across the agricultural value chain
