CRDB Bank Secures TZS 182 Billion for Lending to MSMEs and to Support Recovery from COVID Disruptions

Dar es Salaam 29th March 2022– CRDB Bank Plc has secured TZS182 billion from leading private sector financier, Proparco; to boost its capacity to lend to micro, small and medium-sized enterprises (MSMEs) in Tanzania.

The amount, in form of a credit line and two portfolio guarantees, will be channelled towards financing MSMEs in line with the country’s economic growth agenda, with a particular focus on women-led enterprises, and those recovering from the COVID-19 disruptions.

Proparco, an arm of Agence Française de Développement Group (AFD Group), provides funding and support to both businesses and financial institutions in Africa, Asia, Latin America and the Middle East. Speaking during a signing ceremony in Dar es Salaam, CRDB Bank Group CEO and Managing Director, Abdulmajid Nsekela said the partnership was timely and would go a long way in revitalizing the MSME sector and spurring economic growth.

“The last three years have been difficult, particularly for MSMEs, as the majority have grappled with a lot of uncertainty. We expect that this guarantee facility, alongside our innovative financial solutions, will provide the much-needed support to business owners and enable them to emerge financially healthier and stronger.”

"Nidhahiri kuwa katika kipindi cha mitatu iliyopita wajasiriamali wengi wameathirika na janga la UVIKO-19. Tunatarajia kuwa fedha pamoja na dhamana hizi tunazozipata leo, pamoja na huduma zetu bunifu kwa ajili ya wajasiriamali, zitasaidia kuwainua na kuwawezesha wajasiriamali nchini kuboresha biashara,” amesema Nsekela

The credit line and portfolio guarantee granted by Proparco comprise:

• A USD 50 million credit line (TZS115 billion) to support the bank’s financing activity towards MSMEs. It will also help CRDB Bank set up new, innovative products dedicated to the agricultural sector to increase the sector’s resilience and capacity to adapt to climate change. • An €8 million (TZS 20 billion) guarantee to help CRDB Bank support MSMEs that have been particularly affected by the Covid-19 crisis. This guarantee offers, made possible thanks to resources specially allocated by the French government, as part of the Resilience component of AFD Group’s Choose Africa initiative. • Another €18.5 million (TZS 47 billion) EURIZ guarantee, will cover up to 70% of loans granted to women entrepreneurs. This guarantee will be supplemented with a technical assistance grant to reinforce the capacity of the Bank to serve them. Launched in May 2019, with the support of the European Union (EU) and the European Development Fund, and the Organization of African, Caribbean and Pacific States (OACPS), the EURIZ guarantee aims to facilitate access to credit for MSMEs in particular in sectors with a high development impact, to help them play their essential role in economic growth and job creation.

In his remarks, Proparco CEO, Gregory Clemente noted that the credit line and two guarantees will contribute to Choose Africa, a French initiative launched in 2018 and dedicated to supporting African entrepreneurs, start-ups and MSMEs.

“Proparco is pleased to initiate this relationship with CRDB Bank and to welcome it as a new partner of the Choose Africa initiative. The comprehensive package of support illustrates Proparco’s commitment to Tanzanian MSMEs and CRDB Bank to provide the right set of products and tools, to meet the needs of entrepreneurs,” said Mr Clemente.

CRDB Bank is leading the efforts of supporting entrepreneurs in Tanzania through transformational financial solutions. By closing the financing gap, the Bank enables MSMEs to increase sustainable growth and be a source of employment, skills and wealth creation. In turn, this serves to reduce poverty throughout the country.

This project will contribute to Sustainable Development Goals #5 (Gender Equality) and #8 (Decent Work and Economic Growth) and Tanzania Five Year Development Plan 2021/22 – 2025/26.