Posted on August, 30, 2018 at 10:07 am
According to TADB board chairperson Rosebud Kurwijila, the capital boost will allow the bank to address challenges that include a limited capacity for lending.
According to TADB board chairperson Rosebud Kurwijila, the capital boost will allow the bank to address challenges that include a limited capacity for lending.
Speaking at a meeting with the Parliamentary Public Investment Committee (PIC) to discuss the bank’s investment and strategic plan in Dodoma yesterday, Kurwijila said TADB needs to be enabled so it can provide low interest loans to farmers as part of transforming the country’s agricultural sector.
“Due to the high demand for loans, the bank has been unable to issue loans to clients like commercial farmers because the highest amount that it can approve is just 15 million/-,” she said. Launching the second phase of the government’s Agriculture Sector Development Programme (ASDP) back in June, President Magufuli accused TADB of diverting from its mandate by doing business with other financial institutions instead of directly with farmers.
“I am not satisfied with the performance of TADB... it has so far failed to provide any relief to farmers. The provision of loans to farmers has been too slow or non-existent,” the president asserted.
He said farmers should have by now benefited from at least 300 billion/- in loans from the bank, but since its establishment in 2014 it hasn’t issued a single cent in credit to farmers.
When first established four years ago, the bank was given at least 60bn/- by the government as start-up capital, and also secured a 207.5bn/- loan from the African Development Bank (AfDB) to further expand its capital base and start properly empowering farmers.
But according to the Controller and Auditor General (CAG)’s report for the financial year 2016/17, TADB has been investing most of its funds in fixed deposit bank accounts instead of issuing loans to the agriculture sector “which is its core business line.”
The report showed that as at 31st December 2016, TADB had placed 54.7bn/- in fixed deposit accounts, the amount being almost 91 per cent of the total advance toward share capital.
“I have noted that the bank has not been adequately performing the functions for which it has been established,” the CAG noted in the report.
Kurwijila told members of the PIC in Dodoma yesterday that the bank was taking initiatives to mobilise resources to boost its capital, with its main challenge being high demand versus limited capital.
She said TADB’s ultimate goal is to cover the diverse needs of its main clients, namely farmers scattered across the country. Amongst its plans is to introduce an agricultural park in each of eight clusters established countrywide, she explained.
According to TADB acting managing director Japhet Justine, the bank presently serves small, medium and commercial farmers. However, he explained, loans for commercial farmers are issued only to applicants who indicate clearly how smallholder farmers can benefit from the project for which the loan is sought.
PIC chairman Raphael Chegeni called on the bank to expand its services further so that all farmers can easily access various financial products.
He also advised TADB to consider designing loan products that suit government bodies that are closer to farmers, such as local government administrative councils.
Source: IPP Media