news - Tanzania pays off banks to rescue farmers

2012 Annual Conference and the 1st African SPM Conference

from 24/09/2012 to 29/09/2012

Kampala (Uganda)

The Africa Microfinance Network (AFMIN) will organize its 11th Annual Conference
and the 1st African SPM Conference in Kampala, Uganda, from September 24th to 29th, 2012

Discover job opportunities available and their contacts
Click here
More links
More links
Tanzania pays off banks to rescue farmers
July 15, 2009

Dodoma, July 15, 2009 (Business Daily) - President Jakaya Kikwete on Tuesday announced a TSh1.7 trillion package to cushion the Tanzania economy from the global financial crisis.

The package will be directed to crucial sectors whose problems were likely to shake the national economy such as agriculture, investment, infrastructure and food security.

Out of the money, the government will channel TSh21.9 billion directly to banks to cover for the losses suffered by co-operatives and firms which bought agricultural products from farmers as a result of the economic crisis.

Speaking to MPs in Dodoma on Tuesday, President Kikwete said the funds will be sourced from the government’s budget for 2009/2010.

He said the government will further grant guarantees to financial institutions for loans worth Tsh270 billion extended to companies which cannot repay the money due to the existing crisis. This will cover sectors such as manufacturing, industries, tourism especially hotels and tour operators.

“The guarantee will be for 2 years and the government has already spoken to financial institutions which have extended loans to these firms not to charge interest for the period of the guarantee,” he said.

Another measure taken by the government in ensuring that the global economic crisis is under control is to avail affordable capital for businesses. Under this scheme, the government intends to release a stimulus pack of TSh200 billion through commercial banks.

Another segment will go into guarantee schemes. The state is allocating TSh10 billion for export guarantee scheme and another TSh10 billion for SMEs.

“The effect of this is that the TSh10 billion extra in the export guarantee scheme will enable the government to guarantee a total of TSh226.5 billion worth of exports,” he said.

The SME Guarantee Scheme which started with a capital of TSh 500 million will also be able to guarantee small businesses up to the tune of TSh 60 billion as opposed to the TSh 6.5 billion earlier on.

According to the president, mining companies which have also suffered losses of income due to the crisis will also be granted a 2 years royalty leave.

“These firms are complaining of difficulties. The state has decided to grant them a recovery grace period,” he said.

OTHER NEWS