USAID and IESC Set to Expand Access to Agriculture Finance in Tanzania
January 18, 2024
IESC is excited to announce the launch of the new three-year USAID Feed the Future Tanzania Agri-Finance Project to improve access to finance for smallholders, women, youth, and micro, small, and medium (including large) enterprises (MSMiLs) in Tanzania. The $3 million project has a particular emphasis on expanding investments in priority technologies, including climate-smart irrigation, inputs, storage, and value addition. The Project aims to enhance agricultural finance, promote lending and investment, and boost agricultural productivity and incomes in a more inclusive ecosystem.
Agriculture is critical to Tanzania’s economy, contributing nearly one-third of GDP and employing 75 percent of the population. The sector is of particular importance for women, who make up 70 percent of the agricultural labor force, as well as for youth, with nearly 800,000 young Tanzanians entering the labor force each year. Despite the importance of the agriculture sector in Tanzania, it remains underserved by the country’s financial sector – limiting job, productivity, and income growth.
The Project will also address market coordination failures between the demand and supply sides of the agricultural finance ecosystem by utilizing a system-driven, private sector-led approach to develop commercially oriented solutions that will sustain and scale agri-financing. On the demand side, it will strengthen the bankability of smallholders, women, youth, and MSMiLs to enable them to invest and increase productivity, resilience, and incomes through the use of priority technologies. On the supply side, it will support financial institutions to develop new agri-finance products and improve operational capabilities through innovations such as automated performance monitoring, appropriate risk assessment tools, and agricultural credit portfolio management tools that enable financial institutions to successfully disburse and manage loans for priority technologies.
The Project’s interventions will reach 18,000 borrowers with an emphasis on youth and women, and support 20 financial institutions, including commercial banks, microfinance institutions, community banks, and SACCOs, to facilitate $21 million in agricultural loans.
The USAID Feed the Future Tanzania Agri-Finance Project is funded by the U.S. Agency for International Development. The U.S. Agency for International Development administers the U.S. foreign assistance program providing economic and humanitarian assistance in more than 80 countries worldwide.
