Through a credit line and portfolio guarantees amounting to a TZS182 billion commitment, Proparco will help boost CRDB Bank’s capacity to support micro, small and medium-sized enterprises (MSMEs) in Tanzania, with a particular interest for MSMEs led by women and those that have been affected by the Covid-19 crisis.
CRDB Bank is one of Tanzania’s leading financial institutions, offering a comprehensive range of services to its clients. It plays an important role in the financing of the private sector, in particular in the field of agriculture. MSMEs are also served through products tailored to support their needs.
To support its SME financing activity, Proparco has granted CRDB Bank a credit line and two guarantees amounting to a total support of more than TZS 182 billion:
• Proparco’s USD $50 million credit line (TZS115 billion) will support CRDB Bank’s financing activity towards MSMEs. It will also help CRDB Bank set up new, innovative products dedicated to the agricultural sector to increase sector’s resilience and capacity to adapt to climate change.
• A €8 million (TZS 20 billion) guarantee to help CRDB Bank support MSMEs that have been particularly affected by the Covid-19 crisis. This guarantee offer was 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 which 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, in order to help them play their essential role in economic growth and job creation.
The credit line and two guarantees will contribute to Choose Africa, the French initiative dedicated specifically to African entrepreneurs, start-ups and MSMEs. This initiative is being implemented by AFD Group since 2018.
“Proparco is happy to initiate a promising relationship with CRDB Bank and to welcome it as a new partner of the Choose Africa initiative. This comprehensive package of support illustrates Proparco’s commitment to Tanzanian MSMEs as well as its trust in CRDB Bank to provide the right set of products and tools to meet the needs of entrepreneurs” said Françoise Lombard, CEO of Proparco.
Speaking at the signing ceremony the Group CEO and Managing Director of CRDB Bank Abdulmajid Nsekela said “At CRDB Bank, we are excited to partner with Proparco in this credit line and portfolio guarantees agreement. Proparco is a valuable partner to the Bank; they are as passionate as we are about supporting MSME growth and success in Tanzania. The last three years have been difficult particularly for MSMEs, having to grapple with a lot of uncertainty. We expect that this guarantee facility and our other financial solutions will provide much needed support to business owners and enable them emerge financially healthier and stronger.”
CRDB Bank is leading the efforts of supporting entrepreneurs in Tanzania through provision of transformational financial solutions. By closing the greatest obstacle, which is the financing gap, the Bank enables MSMEs to increase sustainable growth and to 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.