Tanzania: New lending programme to benefit small businesses

The European Investment Bank, Europe’s long-term lending institution, has agreed a new lending programme with Bank of Africa Tanzania that will support investment by small companies across the country. The European Investment Bank will provide EUR 7 million (over 15 billion Tanzanian shillings) that will be matched by Bank of Africa.

The new initiative was formally agreed in Dar es Salaam by Pim van Ballekom, European Investment Bank Vice President for Africa, and Ammish Owusu-Amoah, Managing Director of Bank of Africa Tanzania.

“Investment by small and medium sized companies is essential to create new jobs and unlock business opportunities. We are pleased to have signed a new partnership today with Bank of Africa Tanzania. The European Investment Bank is committed to supporting private sector investment across Africa and today’s new initiative demonstrates our continued commitment to Tanzania.” said Pim van Ballekom, European Investment Bank Vice President.

“We are happy to receive these funds that will enhance Bank of Africa Tanzania to reach more businesses. The SME segments are the Bank’s preferred markets and Of late more emphasize has been placed in areas with many SME such as Dar es salaam, Arusha, Kilimnanjaro, Mwanza, Morogoro, Mbeya and Kahama” commented The Managing Director & CEO Mr Ammish Owusu Amoah.

EU Ambassador Filiberto Ceriani Sebregondi applauded the new initiative. "The European Union has a strong interest to promote equitable growth and job creation in Tanzania. We work with authorities to improve the business climate but ultimately it is the private sector that can create jobs and deliver growth. The new lending programme by the European Investment Bank and Bank of Africa offers a new opportunity to undertake that role."

It is expected that the new programme will support investment by companies active across a broad range of sectors, such as agriculture, fishing, manufacturing, transport, tourism, health and education and is expected to help create hundreds of new jobs. Loans will be managed by Bank of Africa branches across Tanzania and be provided to eligible companies in Tanzanian shillings, US dollars and Euro.

The new engagement with Bank of Africa Tanzania is part of a larger regional initiative to support private sector investment across seven countries in East Africa and represents the second partnership with a local bank in Tanzania through the East Africa Private Enterprise Finance Facility, PEFF.

Over the last 5 years the European Investment Bank has worked with leading banks across the region, such as Bank of Africa, and provided more than EUR 336 million for investment by local small and medium sized companies.