DEG, the German development finance institution, has announced a partnership with Tanzania’s Cooperative Rural Development Bank (CRDB) to provide a $50 million long-term loan to support small businesses in the country. This funding, which includes a guarantee from the European Fund for Sustainable Development Plus (EFSD+), aims to address the lack of access to formal financing for small enterprises, particularly those owned by women and young adults.
By aligning with key UN Sustainable Development Goals such as poverty reduction, gender equality, and decent work, this collaboration is set to boost local economic development and promote inclusive and sustainable growth. The EFSD+, a part of the European Union’s Global Gateway Initiative, is dedicated to supporting infrastructure projects globally and working closely with the private sector to achieve development policy objectives.
Abdulmajid Nsekela, the CEO of CRDB Bank, highlighted the importance of empowering women and youth in driving the future of Tanzania and the region. He emphasized the transformative impact of inclusive financial solutions in unlocking potential, fostering innovation, and driving sustainable growth.
Small businesses are vital to Tanzania’s economy, employing over five million people and contributing significantly to local income. However, many of these businesses face challenges in accessing formal financing, creating a crucial gap that this investment aims to bridge.
DEG has a long history of supporting businesses in East Africa, providing funding and expertise directly to the ground through its subsidiary, DEG Impulse. Initiatives like the develoPPP Ventures programme focus on funding fintech and mobile payment startups in Tanzania to enhance financial services accessibility, particularly for underserved populations.
In its 2024 Development Report, DEG highlights the positive impact of its work in emerging markets, helping companies navigate global challenges like climate change and geopolitical instability. In 2023, DEG’s portfolio companies supported approximately three million jobs and generated enough green electricity to power 49 million people, demonstrating the institution’s commitment to sustainable economic development.
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