Sido, bank ink deal over SMEs

Operators of Small and Medium-sized businesses looking for premises in which to develop their ventures may put on broad smiles as Tanzania Investment Bank (TIB) and the Small Industries Development Organisation (Sido) have come up with a solution.

The two institutions inked a Memorandum of Understanding (MoU) yesterday which will see development of industrial areas, complete with supporting infrastructure, for Small and Medium Enterprises (SMEs).

The agreement opens a chapter of improving and developing industrial areas in various parts of the country, beginning with Dar es Salaam Region.

“As an investment bank, we have seen the hardships SMEs face as they set up an investment for the purpose of production. 

"We will only succeed in the fight against poverty if we increase production, and for SMEs to do that, they must be empowered to be able to access loan facilities from the banks and this is what this MoU is entails,” the TIB managing director, Mr Peter Noni said in Dar es Salam yesterday.

He said banks fail to give loans to SMEs because the latter lack traceability and other requirements needed as collateral.

“This is why we partnered with Sido. We have agreed to start working together to find areas which will be allocated for the construction of industrial areas and improve the already existing ones by providing required infrastructure which will enable small scale producers to find cheaper conducive places to hire according to their needs. We believe this will greatly cut down on their cost of production,” he said.

Mr Noni said after having a reliable area for production, SMEs that will be in the programme would graduate to become credit worthy, hence access loans with ease.

For his part, Sido director general Michael Laizer raised concerns on the interest rates charged by commercial banks in the country, saying they were exorbitant for SMEs.

He said the TIB/Sido partnership will help SMEs to start up their investments smoothly as they would have access to a cost-effective industrial infrastructure.
Source: The Citizen, www.thecitizen.co.tz, reported from Dar es Salaam 
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