German lender to give Tanzania SMEs 42bn/- financial support
Posted on : Wednesday , 2nd September 2015
EXIM Bank Tanzania has signed a USD 20 million (about 42bn/-) loan pact with Germany’s private enterprise lender, Deutsche Investitions und Entwicklungsgesellschaft MBH (DEG) to support small and medium-sized enterprises (SMEs).
Exim Bank Chief Finance Officer (CFO), Mr Selemani Ponda, said the money, in the form of a senior loan will be disbursed in two tranches based on the progressive growth on lending assistance to the SMEs.
“The Senior Loan assistance comes at an opportune time when the economy continues to remain buoyant and businesses are graduating to the next rung of the ladder — small players looking to be there in the ‘medium’ category.
“The timing is just right for the bank to participate for the required impetus to the sector,” said Mr Ponda through his statement issued to the media.
He said the bank has always remained focused to the cause of SMEs, understanding their business needs and structuring products and schemes to suit the SMEs.
“The Senior Loan assistance comes at an opportune time when the economy continues to remain buoyant and businesses are graduating to the next rung of the ladder — small players looking to be there in the ‘medium’ category.
The timing is just right for the bank to participate for the required impetus to the sector,” he said. The bank currently has a loan book of 582bn/- out of which 291bn/- is financed to the SME sector.
Mr Ponda said that the bank sees an enormous potential for credit assistance to this segment on the backdrop of sustained high economic growth in the Country.
He said that Exim Bank has for more than a decade, maintained strong relations with other leading International Development financing institutions (DFIs) like IFC, PROPARCO, NORFUND and FMO.
“Signing this loan agreement with DEG asserts the confidence of these International DFIs on this ‘largest Local Tanzanian bank’, said Mr Ponda. DEG is a subsidiary of KfW, a German government-owned development bank, based in Frankfurt.
DEG finances investments of private companies in developing and transitioning countries. It has been active in East Africa since 1962, and runs its own representative office in Nairobi.
The current portfolio in East Africa covers a financing volume of over EUR 220 Million. “DEG is proud to be financing the EXIM BANK SME portfolio.
The loan facility will support the further development of the small and medium-size business segment across Tanzania and help to address a major constraint to economic growth”, said Ms Gudrun Busch, Director of Financial Institutions Africa and Latin America at DEG.
Ms Busch added that “In doing so, we contribute to strengthening the Tanzanian financial sector and to creating and safeguarding jobs.”
Mr Ponda said Exim Bank is continuously improving its services and operational efficiency to meet its customer’s needs, while following market trends very closely to remain competitive and meet ever changing diversified financial needs of its customers.
“We have expanded our branch network to 30 outlets in Tanzania with a strategic plan to add 3 more during this year.
This will help us to further improving upon serving the under-banked bankable target segment in the country. The bank has set an ambitious medium term vision to be the ‘Leader in Payments’.
Source : IN 2 EAST AFRICA
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