The Government of Tanzania, through the Ministry of Community Development, Gender, Children, and People with Disabilities, has allocated TZS 18.5 Billion to be lent to small-scale traders at a low interest rate of only 7%.
For context, the average interest rate applied by banks in Tanzania is typically around 15-16%.
To facilitate this initiative, the government has entered into a two-year agreement with NMB Bank, Tanzania’s second-largest bank by assets, in which the country’s Treasury Registrar holds a 31.78% shareholding.
This agreement was signed on May 6th, 2024 by Dr. Seif Shekallaghe, Permanent Secretary of the Ministry of Community Development, Gender, Children, and People with Disabilities, and Ms. Ruth Zaipuna, Chief Executive Officer of NMB Bank.
The loans will be granted to registered small-scale traders identified jointly by NMB Bank and the Ministry of Community Development, Gender, Children, and People with Disabilities.
NMB Bank has outlined its procedures, indicating that before approving these loans, it will conduct on-site visits to verify the eligibility of traders and ensure that the loans reach the intended beneficiaries. Loans will be tailored to suit the specific needs of each business.
Additionally, the bank will provide financial education to beneficiaries to promote responsible fund utilization, thereby facilitating the achievement of their goals and timely loan repayment.
During the signing of the agreement, Dr. Gwajima emphasized that the initial amount of TZS 18.5 billion is expected to grow over time as the government aims to establish sustainable loan programs reaching a wider audience.
She highlighted the potential for these funds, if managed wisely, to generate substantial developmental benefits by fostering economic expansion and enhancing household earnings.
These loans, she explained, form part of the government’s fresh endeavor to empower targeted demographics and ensure that aid reaches its designated recipients.
For her part, Ms. Zaipuna stressed that the agreement underscores the bank’s significant commitment to bolstering the business landscape for all entrepreneurs in Tanzania, particularly small businesses, in line with the objectives of the Sixth Phase Government.
She noted that the bank’s recent accolades, including the titles of Best SME Bank and Best SME Financier for 2024, validate its capability to effectively manage the soft loan facility, ensuring its success.
Want to know more about Banking in Tanzania? Our free Tanzania Business and Investment Guide 2026 covers Banking, plus regulations, key sectors, and investment opportunities—all in one place.
Download Free Guide
