Proparco, the subsidiary of Agence Française de Développement (AFD) focused on private sector development, will increase CRDB Bank’s capacity to support micro, small and medium-sized enterprises (MSMEs) in Tanzania through a credit line and portfolio guarantees amounting to TZS 182 billion.
CRDB Bank is Tanzania’s largest bank and plays an important role in the financing of the private sector.
Proparco’s credit line and two guarantees to CRDB Bank amounting to TZS 182 billion are made of:
• USD 50 million credit line (TZS 115 billion) to support CRDB Bank’s financing activity towards MSMEs. It will also help CRDB Bank set up new, innovative products dedicated to the agricultural sector to increase its resilience and capacity to adapt to climate change.
• EUR 8 million (TZS 20 billion) guarantee to help CRDB Bank support MSMEs that have been particularly affected by the Covid-19 crisis. This guarantee offer was made possible thanks to resources specially allocated by the French government, as part of the Resilience component of AFD Group’s Choose Africa initiative.
• EIR 18.5 million (TZS 47 billion) EURIZ guarantee which will cover up to 70% of loans granted to women entrepreneurs. This guarantee will be supplemented with a technical assistance grant to reinforce the capacity of the Bank to serve them.
Speaking at the signing ceremony, Françoise Lombard, CEO of Proparco said: “Proparco is happy to initiate a promising relationship with CRDB Bank and to welcome it as a new partner of the Choose Africa initiative. This comprehensive package of support illustrates Proparco’s commitment to Tanzanian MSMEs as well as its trust in CRDB Bank to provide the right set of products and tools to meet the needs of entrepreneurs.”
For his part, the Group CEO and Managing Director of CRDB Bank Abdulmajid Nsekela said “At CRDB Bank, we are excited to partner with Proparco in this credit line and portfolio guarantees agreement. Proparco is a valuable partner to the Bank; they are as passionate as we are about supporting MSME growth and success in Tanzania. The last three years have been difficult particularly for MSMEs, having to grapple with a lot of uncertainty. We expect that this guarantee facility and our other financial solutions will provide much-needed support to business owners and enable them to emerge financially healthier and stronger.”
95% of the businesses in Tanzania are Small and Medium Enterprises (SMEs), and they represent about 35% of the country’s GDP, according to the Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA).
In 2021, another of Tanzania’s largest banks, Stanbic, reiterated its commitment to support SMEs.