Posted on September, 5, 2018 at 10:52 am
THE government has said it will continue to capacitate the troubled Tanzania Agricultural Development Bank (TADB), while also strengthening the agriculture window of the Tanzania Investment Bank (TIB) to enhance farmers’ access to loans.
The deputy minister for Agriculture, Dr Mary Mwanjelwa, told the National Assembly here the government recognises that access to financing is one of the biggest challenges facing farmers in the country, hence the need to empower both TADB and TIB to offer better services in this area.
“To access the financing options that these two institutions may offer, we encourage farmers to form or join community groups such as village community banks or savings and credit cooperative societies,” Mwanjelwa said.
The deputy minister was responding to a question from Magomeni member of parliament Jamal Kassim (CCM) on how the government plans to aid farmers through soft loans from sources like TADB.
Just last week, TADB requested for 800 billion/- in additional capital from the government for it to be able to operate more effectively.
According to TADB board chairperson Rosebud Kurwijila, the bank needs the money to improve its capacity for providing low interest loans to farmers.
“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 at present is just 15 million/-,” Kurwijila said.
But both the Controller and Auditor General (CAG) and President Magufuli have recently accused TADB of, among other things, diverting from its original mandate by doing business with other financial institutions instead of directly with farmers.
“I have noted that the bank has not been adequately performing the functions for which it has been established,” the CAG stated in his 2016/17 audit report, adding:
“Instead of issuing loans to the agriculture sector, which is its core business line, it has been investing a great part of its funds in fixed deposit accounts.”
The CAG’s comments were echoed by President Magufuli in June this year, when he said: “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.”
According to the president, farmers should have by now benefited from at least 300 billion/- in loans from the bank since its establishment in 2014.
When first established four years ago, TADB 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.
Source: Daily News