Speaking in Dar es Salaam at the signing ceremony, USAID Deputy Assistant Administrator for the Africa Bureau, Dr Diana Putman said the financing guarantee will benefit micro, small and medium enterprises as well as women and youth-owned businesses.
“The guarantee agreement is intended to strengthen Amana Bank’s ability to provide financing to agribusiness in Tanzania.
We anticipate this program to contribute to sustainable growth of agriculture-related businesses,” she said. In addition to supporting increased access to credit, Putman said the agreement expands access to customers and regions throughput Tanzania, including Zanzibar.
The administrator noted that the agreement with Amana Bank is the first in partnership with an Islamic Bank in sub-Saharan Africa.
The US government supports business development and the role of the private sector in contributing to Tanzania’s development and capacity to achieve self-reliance.
Amana Bank Managing Director Dr Muhsin Masoud said the signing is historical as it marks another milestone in Amana Bank efforts to push for access to finance.
He cited limited access to finance as impeding the growth of women-owned businesses in developing countries, noting that the scheme will help to curb many challenges in agri-business that women and youths face.
He named other challenges as property rights and control over assets, regulations and customary laws which often restrict women’s access to and control over assets that can be accepted as collateral, such as land or livestock.
Another challenge was lack of collateral and start-up capital, where access to collateral and assets-based lending generally constrains would-be borrowers from accessing credit.
He however noted that some women lack awareness on financial options available for them, noting yet another challenge as the cost of getting information.
It is sometimes high due to family obligations, he pointed out. “I would like to give commitment to the USAID team on Amana Bank’s role in ensuring this scheme is going to have a positive impact on Tanzanians,” the director added.