The International Finance Corporation (IFC) announced today that it will provide a USD 100 million loan to CRDB Bank Tanzania to increase access to finance for micro, small and medium-sized enterprises in the country to recover from the economic effects of the COVID-19 pandemic.
Half of the loan will be in local currency and USD 5 million will be lent to CRDB Bank Burundi to support lending to smaller businesses in both countries, especially to women-owned businesses.
Up to 25% of the loan in Tanzania will be dedicated to women-owned businesses. The partnership will increase the availability of longer tenor financing, which is not readily available in the market and has been scarce since the outbreak of the COVID-19 pandemic.
The loans are part of IFC’s Base of the Pyramid Program, which helps financial services providers deliver funding to small businesses that have been hit the hardest by the COVID-19-induced slowdown.
IFC’s financing is also supported by the International Development Association’s Private Sector Window.
Small businesses are critical to the economies in Tanzania and Burundi. In Tanzania, an estimated 3.2 million micro, small and medium-sized businesses contribute 27% of the country’s GDP and employ more than 5 million people.
However, roughly 81% of these businesses lack access to finance. Businesses in Burundi also struggle to access financing.
“This line of credit comes at an opportune time and will boost our support to SMEs while promoting gender diversification across the value chain. At CRDB Bank, we believe that gender equality and women’s empowerment are central to development. Women have been disproportionately affected by the COVID-19 pandemic, facing economic hardships that directly affect their families and communities’ livelihoods. Through this partnership, we will help women-owned small businesses and entrepreneurs recover from the pandemic,” said Abdulmajid Nsekela, CRDB Bank’s Group CEO and Managing Director.
He added that IFC’s financing would support the development of productive sectors of the economy, including agribusiness, health, education, affordable housing, and infrastructure.
Other sectors include climate change mitigation and adaptation, SMEs, as well as women-owned small businesses.
“The partnership between IFC and CRDB will support the growth of smaller businesses in countries where their contribution to jobs and economic activity are immense. The financing will also include a special focus on supporting women-owned businesses and advancing gender inclusion, a key part of IFC’s strategy in Tanzania and Africa more broadly,” said Sérgio Pimenta, IFC Vice President for Africa.
IFC has a long-standing relationship with CRDB Bank. The financing announced today is the fifth facility provided by IFC to CRDB and is part of IFC’s growing work in Tanzania to support the growth of small businesses and boost inclusive finance for women-owned businesses.
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets.
In the fiscal year 2021, IFC committed a record USD 31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic.