Speaking in Dar es Salaam during a memorandum of understanding with PASS Trust to provide financing to agribusiness enterprises, Equity Bank Tanzania’s Managing Director, Robert Kiboti said Agriculture being the backbone of the country’s economy has a lot of potential to unleash.
“At Equity Bank, agriculture is our priority area, and we are targeting agriculture loans to read at 30 percent of our general loan portfolio. We are delighted to join forces with PASS Trust to facilitate access to agricultural financing by agribusiness entrepreneurs in Tanzania,” Kiboti said.
Among other things, the MoU with Private Agricultural Sector Support Trust to allows the bank to disburse loans to agribusinesses in the country to build capacities and increase productivity. The targeted agribusiness entrepreneurs include individuals, Micro, Small, and Medium Enterprises (MSMEs), large enterprises, Micro Finance Institutions (MFIs), and associations which will receive low-cost loans backed by the PASS Trust Credit Guarantee Scheme.
In remarks at the signing ceremony, PASS Trust Managing Director, Yohane Kaduma hailed the enhanced partnership with Equity Bank terming it as an excellent opportunity for agribusiness entrepreneurs in the country.
“The entry of Equity Bank into PASS’ pool of collaborating financial institutions brings to 14 the number of banks that PASS Trust is working with in enabling access to agricultural credit through the PASS Guarantee Scheme,” Kaduma said.
“And we invite even more financial institutions to join this pool of PASS’ collaborating banks so that many more Tanzanians engaged in agribusiness can be able to access credit and increase productivity,” Kaduma added while stressing that PASS Trust wants to continue working as a bridge and catalyst in spearheading access to affordable loans to agribusiness entrepreneurs.
In this operating agreement with Equity Bank, PASS will provide between 20-60 percent credit guarantee to top up inadequate collateral to enable clients to get financing. Women-led agricultural projects will benefit with up to an 80 percent. Over 1.7 million agribusiness entrepreneurs have benefited from the PASS credit guarantee scheme since its inception in the year 2000.
Since 2017, the PASS Trust supported the total value of loans amounting to 6.7bn/- with a credit guarantee commitment of 2.6bn/- under the agricultural value chain. The total credit guarantee fund deposited by PASS Trust at Equity Bank to benefit agricultural entrepreneurs is USD 1.0 million or an equivalent to 2.3bn/-.