PASS challenges banks on agriculture

By a Correspondent, Dar es Salaam

The Private Agricultural Sector Support Trust (PASS) has challenged banking institutions to venture in supporting agriculture and elevate the country’s development.

The challenge has been given by PASS Managing Director, Mr. Iddy Lujina when speaking with journalists in Dar es Salaam yesterday.

“Banks should come out and work with organizations such as ours,” he said.

He noted that young people in Tanzania should not shy away from agriculture sector; instead they should form groups, work hard and seek financial assistance from banks through organizations like PASS.

Giving an example, he said PASS has recorded tremendous achievements in Kilombero sugar plantations where it has helped youths who have formed groups and access loans from banks with the assistance from the NGO

PASS collaborates with seven banks but plans are to partner with more banks.

“I appeal other banks to come out and work with PASS to stimulate investments and growth of private commercial farming and agribusiness,” he said.

Talking on some of the products on which PASS can collaborate with banks Mr. Lujina said under the lender’s Option Guarantee, the lender will decide whether or not to guarantee loans to their borrowers based on predetermined guarantee criteria and a guarantee product policy contractually agreed with PASS.

According to the MD, the linkage banking guarantee product will guarantee loans from highly liquid institutions including large banks and pension funds to prequalified rural financial institutions to be used only for loanable funds supporting those institutions’ agribusiness portfolios.

“Fixed equity hire purchase product is a meaningfully departure from PASS’s traditional way of doing business but maintains our vision and mission.  It is a method for us to take an equity stake in a medium to large scale agribusiness by providing that business access to critical fixed assets without obligating that business to a commercial lender,” he said.

So far, PASS offers business development services; strengthen farmers’ organizations and financial services.

The NGO has set special concessionary loan terms for women entrepreneurs to enable them qualify for more bank loans.

According to Mr. Lujina, PASS has also achieved an excellent loan repayment rate of over 95 per cent, and the collaborating banks are progressively getting more encouraged in financing agricultural investments.

Plans are underway to open new branches in Kilimanjaro and Mtwara regions this year. Currently, the NGO has offices in Mbeya, Mwanza, Morogoro and Dar es Salaam regions.

Ends.