SUPPORTING LOCAL BANKS, SMEs: EIB to offer 1.043tri/
ZANZIBAR: THE European Investment Bank (EIB) on Saturday signed a statement of intent to blend 1.043tri/- to provide credit to Tanzanians banks.
The signing ceremony was held at Stone Town, Zanzibar after a high-profile delegation from the European Investment Bank (EIB) led by its Vice-President Mr Thomas Östros concluded its visit in Tanzania by meeting President Samia Suluhu Hassan.
Mr Ostros said during his meeting with President Samia and Zanzibar President, Dr Hussein Mwinyi, they discussed among others, priorities for public investments to be financed under the Global Gateway.
“It was a good meeting with President Samia, and earlier we met President Mwinyi of the Revolutionary Government of Zanzibar,” he said.
According to the statement that was later released by the European Investment Bank, the financing will go towards supporting Small and Medium-Sized enterprises (SMEs) in Tanzania, under the EU Global Gateway strategy.
European Investment Bank Vice-President, Mr Östros, and the Deputy Ambassador of the European Union to Tanzania, Mr Emilio Rossetti, signed a statement of intent to blend a grant of 15 million Euro (about 43bn/- ) from the European Union with 350 million Euro(1tri/-) loans from the European Investment Bank.
According to the statement, the grant will contribute to early stages of financing to prepare businesses for subsequent commercial investment.
Also read: EIB sets to ramp up investment in Tanzania
“This will help de-risk local banks’ lending to unlock or increase funding to SMEs,” reads part of the statement.
So far, out of the 350 million Euro, the EIB has signed 270 million Euro (775bn/) with three banks such as CRDB which has received 150 million Euro (about 430bn/-, NMB with100 million Euro (about 287bn/-) and KCB Tanzania which has received 20 million Euro (58bn/-).
The remaining 80 million Euro (229bn/-) will be provided to other financial institutions in the country.
The blended package will primarily focus on women and the blue economy sector, for which SMEs access to finance is particularly strained.
“This package under the EU’s Global Gateway investment strategy is aligned with the Tanzanian Government’s priority sectors and Sustainable Development Goals,” reads the statement.
Mr Östros highlighted that small businesses are a key part of the African economy, saying they create jobs and drive economic development and innovation.
“At the European Investment Bank, we use a variety of tools that address financing gaps at the various stages of business creation, including the riskiest ones, so as to develop an efficient entrepreneurial ecosystem driven by entrepreneurs’ skills and expertise,” he noted.
On his side, Mr Rossetti said: “We are working jointly with the European Investment Bank to enhance access to finance for SMEs and promote financial inclusion of underserved people such as startups or youths and women-led businesses in Tanzania. This is part of the EU’s Global Gateway investments for Africa aiming to create new and sustainable jobs”.
Last year, during the EUTanzania Business Forum, EIB Global signed a 270 million Euro (775bn/-) package to support local businesses through co-operation with commercial banks in Tanzania, its largest investment support to any country in Sub-Saharan Africa in 2023.
According to Mr Östros, the financing support has already reached over 10,000 final beneficiaries out of which over 3,000 are women-led enterprises and over 900 are blue economy enterprises and co-operatives in Zanzibar.
The delegation of the European Union to Tanzania and the East African Community is a key actor in the relations between the European Union (EU) and Tanzania as well as the East African Community.
The EU has set out the Global Gateway, a new European strategy to boost smart, clean and secure links in digital, energy and transport sectors and to strengthen health, education and research systems across the world.
