NMB Bank has said loans to farmers should be supported by financial education to kick-start the stagnated agricultural entrepreneurship.
The lender, one of the largest on the land, said some entrepreneurs in the agricultural sector failed to obtain financial loans from financial institutions because their quality of produce does not attract market.
NMB’s Head of Agriculture Isaac Masusu said when launching the Kizimba business model at Sokoine Agricultural University (SUA) in Morogoro region yesterday, that education on loans will be the only way to address farmers’ challenges.
“We have been plagued by the challenge of the quality of our farmers’ produce and the level of our products produced and sometimes even the of lack education that is necessary to boost their produce marketing,” he said.
He said the business model will enable the youth and especially women to be employed in the agricultural sector, because it also focuses on facilitating land access to them that has been a major barrier in their farming activities.
Mr Masusu said that one of the functions of NMB is to partner with cooperative societies in paving the way for farmers to work together with other stakeholders to create opportunities, which enable famers get agricultural loans through groups.
“NMB will now start providing long-term loans to enable farmers benefit from the investments in the agricultural sector, because most of the money needed in agriculture requires long term payments, and many banks want to provide short-term funding that is where the agricultural sectors finds itself getting stuck.
“We will continue to seek long-term capital from various organizations around the world and it will help banks expand the scope of long-term lending to enable the agricultural sector expand,” he added.
Agriculture Minister Prof Adolf Mkenda said that the agricultural sector has been hiring more labour in the country but has been unproductive, citing palm oil, for example in Indonesia and some countries have had significant benefits unlike Tanzania.
“Indonesia for one hectare gets 10 tonnes of palm oil while in Tanzania one hectare get only 0.6 tonnes of palm oil, so there is work to improve our agriculture to bring productivity,” said Prof Mkenda.
Sokoine University of Agriculture Vice-Chancellor Prof Raphael Chibunda said his institution is a major stakeholder in the agricultural sector and through its Sugeco group and programme has made changes by making major reforms for students to learn more.