DAR ES SALAAM, TANZANIA – The government here has plans for a new financing scheme to help Small and Medium Enterprises (SMEs) to run their businesses.
Speaking to East African Business Week in Dar es Salaam recently, the Minister for Industry and Trade, Dr Abdallah Kigoda said one of the constraints to enterprise growth is lack of finance to SMEs.
“My ministry is currently in the process of formulating a finance scheme that will cater for this need in collaboration with Small Industries Development Organization (SIDO) and the TIB Development Bank,” he said.
The Ministry intends to provide a subsidy support of 5% of the interest rate on loans from the bank under the Industrial Development Support Loan programme. SIDO will provide guarantees for the loans from the National Microfinance Bank (NMB) under the Industrial Credit Guarantee Initiative scheme.
Kigoda said the government was aware of the various problems holding back the development of SMEs.
“We are trying judiciously to put in place policies and programmes that are aimed at addressing specific challenges facing women entrepreneurs through the provision of a legal framework that improves the business environment from the start of the business as well as expanding from one level to another,” he said.
He added that the government will continue its efforts to encourage international trade support for the private sector.
This includes capacity building measure and exchange programmes in areas including specialized product development.
“We shall also support the establishment and operationalisation of accredited laboratories and establishing Tanzania Trade Centre in the United States of America,” Kigoda said.
According to the Micro, Small and Medium Enterprise Country Indicators (MSME) baseline survey conducted by the Ministry across all regions in the country in 2010, there were three million entrepreneurs of which women make up 54.3% of the total number.
The government stand on supporting entrepreneurs has come few days after launching the African Women Entrepreneurship Program (AWEP)-Tanzania chapter where minister Kigoda advised entrepreneurs to standardize their products according to the tastes of Americans if they want to gain from the US government preferential trade pact, African Growth and Opportunity Act (AGOA).
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