TANZANIA Agricultural Development Bank (TADB) has dished out 27bn/- to four Lake Victoria Zone cooperative societies to buy coffee from Kagera and Mara farmers this season.
The cooperative societies are namely Ngara Farmers’ Cooperative, Karagwe District Cooperative Union (KDCU), Kagera Cooperative Union (KCU) and Mara Farmers’ Cooperative Union (WAMACU).
Industry and Trade Minister, Innocent Bashungwa said here at the Nanenane Nyakabindi fair grounds in Bariadi, Simiyu that TADB move was an important step in promoting people’s development in Kagera and Mara regions.
The government is keen on development of strategic crops in order to get raw materials and advance the national industrialisation agenda, the minister said.
In total in this season, the bank has set aside 39.6bn/- to buy coffee, and they initially released 27bn/-.
TADB Lake Zone Manager, Mr Mike Granta, who represented Managing Director Japhet Justine, assured the minister that the bank will ensure the payment arrangement was adhered to earn the trust of coffee growers.
Kagera region is the main Robusta coffee producing area and contributes to about 30 per cent of the total coffee production in Tanzania.
The Managing Director said the reduction of interest rates will apply for new loans extended to the two cooperative societies in Kagera region before being extended to other loan beneficiaries.
The government directed TADB, state-owned development finance institution (DFI), to lower interest rates on loans from 12 to 9 per cent in May this year to ease the financial burden on farmers whose primary societies acquire loans from commercial banks.
Through this initiative, the government wanted to support farmers who bear the cost of credits provided to their cooperative societies through deductions on their money from crop sales.