The European Investment Bank (EIB) Vice-President, Mr. Thomas Östros, and Mr. Emilio Rossetti, Deputy Ambassador of the European Union to Tanzania, have formalized an agreement aimed at blending a 15 million EUR (43 billion TZS) grant from the EU with 350 million EUR (1 trillion TZS) in loans from the EIB. This initiative is intended to provide financial support to Tanzanian banks, particularly targeting Small and Medium-Sized Enterprises (SMEs) under the EU Global Gateway strategy.
The grant from the EU will facilitate early-stage financing to prepare businesses for subsequent commercial investments, thereby reducing the risk for local banks in lending to SMEs and enabling increased funding access.
Currently, the EIB has already allocated 270 million EUR (775 billion TZS) across three banks in Tanzania: CRDB (€150 million equivalent to 430 billion TZS), NMB (€100 million, equiv. 287 billion TZS), and KCB Tanzania (20 million EUR, equiv. 58 billion TZS). The remaining 80 million EUR (229 billion TZS) will be dispersed to other financial institutions in Tanzania.
The blended financial package places a special focus on supporting women and the blue economy sector, addressing significant financing challenges faced by SMEs in these areas. This aligns with both the Tanzanian Government’s priority sectors and the Sustainable Development Goals, forming part of the EU’s broader investment strategy in Africa.
Mr. Thomas Östros emphasized the critical role of small businesses in driving economic growth and innovation across Africa. He highlighted the EIB’s commitment to leveraging various financial tools to bridge financing gaps at different stages of business development, fostering a robust entrepreneurial ecosystem.
Mr. Emilio Rossetti underscored the joint effort with the EIB to enhance financial access for SMEs in Tanzania, particularly underserved groups such as startups, youth-led ventures, and businesses led by women. This initiative forms part of the EU’s broader Global Gateway investment framework aimed at creating sustainable job opportunities in Africa.
The EIB’s support, characterized by favorable financial terms including longer tenures than typically available in local markets, also includes technical assistance to both financial intermediaries and final beneficiaries. This holistic approach aims to ensure the successful implementation of projects, thereby contributing significantly to the establishment of sustainable enterprises in Tanzania.
