African Trade Insurance Agency (ATI), a pan African trade insurance company, is expanding its product designed for Small and Medium-Sized Enterprises (SMEs) in Tanzania.
The new product aims to reduce the lending gap between banks and SMEs companies existing due to the lack of necessary collateral to secure loans.
African Trade Insurance Agency would be providing banks with a cover against the risk of non-payment.
“Our approach to finding an effective solution started with idea that we wanted to help banks lend safely to as many clients as possible. We hope this product will continue to evolve to help them spread their financing to under-served populations, such as SMEs, with the objective of bringing them into the formal financial arena,” noted George Otieno, ATI’s Chief Executive Officer.
In a recent statement ATI pointed out that in Kenya a number of banks have already lined up to sign onto the product.
ATI now plans to launch this product in Tanzania within a few months.
Ms Tusekile Kibonde, a newly appointed ATI Tanzania Representative, has hopes that the product would improve Tanzanian World Bank Index standing, which is currently the fourth in the East African community after Kenya, Rwanda, and Uganda, in a category of a company’s capability of obtaining a bank loan.
“Tanzanian companies are practical and I believe ATI has achieved success in this market precisely because we offer practical solutions — and based on the response from the business community, I believe there is still room for growth here, particularly in the energy sector,” said Ms Tusekile Kibonde.
ATI was formed in 2001 by Tanzania and other COMESA countries with the support of the World Bank to facilitate, encourage and develop the provision of insurance-related products, guarantees and other financial instruments in order to promote trade and productive activities in Africa.
The continental insurer had established its presence in Tanzania since 2010 and had facilitated over 1.5 billion US dollars worth of operations.
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