News Column

Banks Urged to Simplify Loan Procedures for MSMEs

August 21, 2014

THE government has called upon banks and other financial institutions in Tanzania to soften procedures of getting loans to facilitate the growth of Micro, Small and Medium Enterprises (MSMEs) in the country.

The Minister of State, Prime Minister's Office, Investment and Empowerment, Dr Mary Nagu said in Dar es Salaam on Tuesday that access to loans was a key hurdle to the growth of MSMEs in the country and that it was high time this was addressed.

"I call upon banks in the country to help in spearheading the development of this sector that is crucial to sustainable development," she said at a workshop jointly organised by the Tanzania Private Sector Foundation (TPSF) in collaboration with the Financial Sector Deepening Trust (FSDT).

The workshop titled "Access to Financial Services as a Key Constraint to the Growth of Micro, Small and Medium Enterprises (MSMEs) in Tanzania," brought together government officers and the business community to brainstorm on access to finance to MSMEs.

She said that the government was implementing various programmes in collaboration with the private sector and development partners to ensure that MSMEs operate in an enabling business environment to enhance their competitiveness.

Such interventions include incentives for firms to formalise operations and thereby reduce the magnitude of informal business activities and enhancing competitiveness of enterprises in terms of skills, technology, adherence to international standards, as well as strengthening market linkages.

"The role of MSMEs in the achievement of our economic development goals cannot be overemphasised," she said. The Executive Director, TPSF, Mr Godfrey Simbeye said the experience sharing workshop was crucial in looking for solutions regarding financial challenges facing the private sector.

He noted that should entrepreneurs in the country access financial services easily, the economy have a chance to progress at a better pace compared to what is happening now.

"Our challenge to grow as a nation is contributed by lack of smooth and effective financial support to enterprises," he said, adding that banks have a big role to play in solving this.

He emphasised that should the country's MSMEs effectively supported, it has the potential to create many employments, hence development of the country at large.

The SME Finance Specialist from FSDT, Mr Peter Kingu said there is every reason for financial institutions to expand and embrace more entrepreneurs in terms of offering them more financial services without too many constraints.

The workshop involved members from the private sector, corporate entities, research institutions, banks and public sector. It is hoped that deliberations from the workshop will help in forging ahead the agenda for helping the country's MSMEs

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Source: AllAfrica

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