In their bid to align themselves with the objectives of the Government to build an industrialized economy, KCB Bank Tanzania has allocated over $48 million (Tshs. 110 billion) for the small and medium enterprises (SMEs). The SMEs have played a paramount role, making an economic impact with their contribution to the GDP in the country.
The financial institution has set aside some millions of dollars to promote SMEs’ business ideas and support their existence. It is believed the amount could rise should the ideas be proved to be profitable to the economy. The gesture will not only promote the bank’s influence but seeks to help upcoming businesses find capital for their operations.
Such business enterprises had decried of their inability to access funds from the banking sector, with the institutions opting to lend to the Government and other established businesses. They missed out on the financial services of the banks and had to borrow from SACCOs and other money lending platforms. Following their significant performance early last year, the banking sector has opened its door to serve their needs.
A number of businesses have already enjoyed the benefits accrued to the soft loans offered by the commercial bank, while others could be accessing some funds soon. Farmers form the majority of the SMEs businesses. With the country’s mainstay being agriculture, there are plenty of reasons why KCB Tanzania has opened its services to the farmers.
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According to a survey done by TanzaniaInvest, 95% of the businesses in Tanzania are predominantly SMEs, and their contribution to the country’s GDP accounts for 35%. They have also created employment opportunities and have become a source of income for Tanzanians. The sector has been reckoned as a long-term contributor to the country, to become a middle-income economy.
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Despite the array of challenges the sector faces such as poor business development services and undeveloped infrastructure, it has pulled itself together to perform well against all odds. In developing an SME financial ecosystem in the country, there will be more access to finances to support the sector and its operations.
