NMB Bank has today launched a multi-Billion shilling five year strategy aiming at revamping agricultural financing in the country. This strategy is referred to as “AgriBiashara”.
With the new strategy, NMB adopts the value chain approach while expanding its activities in agriculture sector by increasing the number of crops from the previous 5 to more than 12. The bank’s financing in agriculture will allow scheme financing through AMCOs and other farmers groups expand the scope of crops, adopt the value chain by focusing not only to primary agriculture production but also input suppliers, traders, processors, importers and exporters.
Under the new approach, at least TZS 500 billion has been set aside to provide credit to agriculture in the country for the coming 5 years. The finance solution that facilitates access to credit is expected to aid farmers in achieving improved cultivation practices, higher yields and ultimately increased household income while increasing the export volumes of agriculture products.
Speaking at the launch of the AgriBiashara business plan, the NMB Managing Director, Ineke Bussemaker, said the bank recognizes the important role the agricultural sector plays in the country’s economy and has taken deliberate efforts to expand the financing and designing products and services targeting at developing the sector.
“Access to credit has been a major stumbling block in allowing players in agriculture to be employed in the sector and its value chain. The new plan and structure of agribusiness financing which we are launching today, will provide an innovative solution in access to financing in agricultural sector,” Ineke said.
Ms Bussemaker further said, “Given the importance of developing agriculture in Tanzania, we aim to assist in creating a system whereby smallholder farmers and players in agriculture value chain can improve their efficiencies at all levels: efficiency in input procurement, production efficiency through access to new technology (seeds, fertilizer and mechanization) as well as efficiencies in the marketing of agricultural commodities. All these can be possible through access to reliable financial services in agriculture.
There are enormous opportunities in agriculture at NMB”, she added. “We have seen the opportunities and we believe by expanding the support to the sector we can have direct impact to both improving the lives of farmers and also positively impacting in fulfilling the mission of NMB”, she emphasized. Ms Bussemaker also said that NMB is already reaching over 600,000 smallholder farmers by financing their crop production. In its new strategy, the bank is also targeting larger commercial farmers, input suppliers, processors, traders and others players in the agribusiness value chain.
It was said during the launching of the strategy that as part of NMB’s corporate social responsibilities, the Bank provides financial literacy and basic business training to many Tanzanians, and not the least to agribusiness players. This involves empowering them with the knowledge and understanding they need to manage their finances.
Agriculture is the back bone of the country’s economy. It contributes about 70% of the rural household’s income, employs over 75% of the Tanzanians and contributes about 26% of the country’s GDP. Some 46% of the country’s land is suitable for agricultural production; yet only 19% of that is utilized. Growth of the sector is around 4% per annum, but there are crop subsectors with surprisingly large growth, where also export business in some cases is increasing rapidly. Although there are many issues still to be solved in the agricultural environment, the outlook is more than promising in many areas.
