In a bid to strengthen services to Tanzania?s agriculture sector, the Private Agricultural Sector Support Trust (PASS) has introduced new products to stimulate smooth growth of the sector.
PASS managing director Iddy Lujina
The new development was announced yesterday in Dar es Salaam by PASS managing director Iddy Lujina during a seminar to introduce them to banking institutions that the organisation was all out to see the sector enjoy an upper hand in contributing to the country?s national economy.
He named the products as lender?s option guarantee (portfolio guarantee); linkage banking guarantee (institutional guarantee); modified traditional guarantee (indemnity fund) and fixed equity hire purchase product.
?All these new and revised products focus on PASS?s goal, which is to stimulate investments and growth of private commercial farming and agribusiness,? Lujina told reporters.
He said under the lender?s option guarantee, the lender will decide whether or not to guarantee loans to their borrowers based on predetermined guarantee criteria and a guarantee product policy contractually agreed with PASS.
According to the MD, the linkage banking guarantee product will guarantee loans from highly liquid institutions, including large banks and pension funds, to prequalified rural financial institutions to be used only for loanable funds supporting those institutions? agribusiness portfolios.
?Fixed equity hire purchase product is a meaningful departure from PASS?s traditional way of doing business, but maintains our vision and mission. It is a method for us to take an equity stake in a medium- to large-scale agribusiness by providing that business access to critical fixed assets without obligating that business to a commercial lender,? he said.
A PASS consultant from Inspired International Richard Pelrine said although PASS had been performing well in recent years, the challenge has been to have an effective mechanism to multiply funds to many people.
?We want to have greater access,? he said, adding that it was his hope that the new products will double or triple the number of current 600 PASS beneficiaries in three years to come.
He said his experience showed that such products brought tremendous positive developments in other African countries such as Uganda and Ethiopia.
A representative from CRDB Bank, Musa Lwila, hailed the products, saying they will help many people and interested groups benefit from PASS funds.
So far, PASS offers business development services; strengthens farmers? organizations and financial services.
It collaborates with seven banks, but plans are underway to partner with more banks.
PASS has active branches in Morogoro, Dar es Salaam, Mbeya and Mwanza regions. It plans to open a branch in Kilimanjaro and Mtwara regions later this year to cover all zones of the country.
?Over 35,000 farmers have been supported by PASS and have obtained loans to the tune of 95b/-,? said Lujina.
PASS?s target is to assist farmers and agribusiness in general to access loans to the tune of 200b/- in the next three years in areas of crop and livestock production, agro inputs supply, crop trading, rural transport, irrigation, agro-processing, and improved storage and warehousing.
Over 15 representatives from banking institutions attended the seminar.
Source The Guardian
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