According to a recent article in the Daily News, the Government of Tanzania has assured the National Assembly that it is planning to continue with the process of recapitalizing the Tanzania Investment Bank (TIB).
In addition, the government has said that it is also interested in the possibility of broadening its lending reach to include farmers.
The Tanzania Minister for Finance and Economic Affairs, Mr. Mustafa Mkulo, spoke to the House at the end of the debate on the Supplementary Appropriation Bill for the 2009 financial year.
According some Members of Parliament the amount of funding that was set aside in order to support the country’s farmers, Tsh 3bn, was far from sufficient for the bank to adequately support the regional farmers.
In his speech to the House, Mr. Mkulo agreed that the current amount that had been set aside for the TIB would not be able to effectively meet the current needs of the farming industry.
Currently, this mini-budget is receiving its finances from the funds that were recovered from the controversial Bank of Tanzania External Payment Arrears (EPA) account and were redirected to the enhancement of agricultural and livestock activities by President Jakaya Kikwete.
Mr. Mkulo went on to say that in order to ensure that the TIB would be able to successfully serve as an agricultural bank in the region, efforts to secure more funding for the bank would have to be heightened.
To this end, Mr. Mkulo requested that legislators approve Tsh 53bn worth of regular expenditures for two ministries in addition to the TIB.
Based on this allocation of resources, which was approved by the House earlier this week, the Ministry of Agriculture, Food Security and Cooperatives will receive Tsh 40bn and the Ministry of Livestock Development and Fisheries will be given Tsh 10bn.
As of last June, the capital of the TIB stood at Tsh 29bn, however, since then, the bank has been granted an additional Tsh 21bn to help support and re-establish it.
Keeping all of this in mind, Mr. Mkulo requested that legislators understand that the ministry is working towards widening lending opportunities so as to include farmers, but also requested that people recognize that the TIB is not yet ready to support a large number of agricultural loans.
For agricultural loans, Mr. Mkulo said that Tanzania’s National Micro-finance Bank (NMB) was still capable of handling these requests.
In addition, Mr. Mkulo also suggested that the farming community take advantage of the Financial Leasing Act so as to secure loans that would be required in order to purchase agricultural tools such as tillers.