THE East African Development Bank (EADB) is disbursing 63.2bn/- for lending to small and medium-sized entrepreneurs (SMEs) via TIB Development Bank, Azania Bank and the Tanzania Mortgage Refinance Company Limited (TMRC).

Dr Charles Mwamwaja, the Treasury commissioner for financial sector development, said at a press conference in Dar es Salaam yesterday that the three institutions have signed agreements with the EADB for lending to “critical segments of the country’s economy.’

The Treasury executive who also serves as the chairman of the EADB board of directors said such financial instruments play crucial roles in accelerating economic diversification and job creation.

“The government welcomes the commitment demonstrated by EADB and its partners in supporting Tanzania’s economic transformation,” he said, noting that the three financial institutions will extend affordable loans to SMEs to grow their existing businesses.

They will obtain capital to grow their businesses, with part of the funds being intended to enable people to afford decent residential properties with new investments into the sub-sector, he stated.

“This arrangement is expected to benefit an estimated 60,000 people across the country with SMEs capital increase and residential houses,” he explained, pointing out that TIB Development Bank will obtain 30bn/-, Azania Bank Plc being extended 13.2bn/- while 20bn/- is being directed at TMRC.

These financing agreements will ignite inclusive growth, empower our SMEs and contribute significantly towards the realization of the third five-year development plan ending in the new financial year, he stated.

EADB’s mission has always been to serve as a catalyst for sustainable development in East Africa., he said, noting that the signed agreements not only unlock financing for key sectors “but also reflect the government’s responsiveness to stakeholder feedback and the real needs of the economies of EAC member states.”

Under the agreement, TIB Development Bank will utilize the money “to accelerate national economic growth and foster local entrepreneurship,” he said, affirming that the funding is earmarked for long-term financing of 20 to 25 projects including manufacturing, tourism, services, mining, real estate and infrastructure.

“This targeted support is aimed at enabling the country’s transition into a middle- income economy by bolstering SMEs and driving sustainable development,” he further noted.

Funding to TMRC will facilitate access to medium and long-term mortgage financing for regulated commercial banks and financial institutions, otherwise known as primary mortgage lenders (PMLs), he said.

“The loan facility will directly address Tanzania’s persistent housing deficit, quicken the building of affordable homes and support the government’s Big 4 development agenda,” he asserted.

The Azania Bank Plc, funding is meant for lending to SMEs operating in manufacturing, renewable energy, construction, education, health and the agricultural value chain.

Infusion of this capital will enable the bank to provide critical USD-denominated loans, supporting a new generation of Tanzanian entrepreneurs and ensuring that businesses have the resources they need to expand and create jobs, he specified.

Bernard Mono, the EADB acting director general, said Tanzania’s economic landscape is driven by a complex interplay of factors that demand innovative financial solutions, “which is precisely what EADB strives to deliver.”

“As we forge these partnerships, we remain acutely aware of the transformative potential they hold for businesses, communities and individuals across Tanzania,” he added.