Tanzania: Financial Services for Rural Poor Vital, Say Queen Máxima and Top UN Officials

press release

Dar es Salaam/Dodoma/Rome — Her Majesty Queen Máxima of the Netherlands finished a three-day visit to Tanzania along with top officials of the three United Nations Rome-based food agencies to support accelerating the access of farmers to financial services.

Queen Máxima, in her capacity as the UN Secretary General's Special Advocate for Inclusive Finance for Development (UNSGSA), led the delegation in exploring ways to link the UN's food security and development activities in Tanzania with efforts by government, the UN and the private sector to boost access to savings, insurance, credit, payments and other financial services, especially for smallholder farmers and poor families in rural areas.

Queen Máxima traveled with Ertharin Cousin, Executive Director of the UN World Food Programme (WFP), Maria-Helena Semedo, FAO's Deputy-Director-General for Natural Resources of the UN Food and Agriculture Organization (FAO) and Adolfo Brizzi, the Director of the Policy and Technical Advisory Division at the International Fund for Agricultural Development (IFAD), who represented the IFAD president.

The UN officials noted how FAO, IFAD and WFP programmes, investments, technical knowledge and expertise, along with the advice and outreach of the UNSGSA, can connect agriculture, food security and rural development issues with emerging national financial inclusion strategies and programmes. The UN works to enhance food security and agricultural production, while at the same time helping expand affordable access to financial services.

The delegation arrived in Tanzania on Wednesday from Ethiopia. In Dar-es-Salaam on Thursday, they joined the launch of the National Financial Inclusion Framework developed by the Bank of Tanzania, which aims in part to ensure that at least half of the adult population will have access to formal financial services by 2016. In a speech at the launch ceremony, the Queen said that the UN is committed to supporting the framework and commended Tanzania's remarkable progress in expanding financial inclusion.

The delegation met the President of Tanzania as well as senior officials from government and financial organizations to discuss how to accelerate access to the financial services that help farmers manage irregular cash flows and respond to external shocks such as droughts and floods, invest in capital to improve their productivity, reach markets, and access insurance to mitigate risks of crop loss.

Exchanging ideas

On Friday, they visited projects supported by FAO, IFAD and WFP in the Dodoma area, meeting with rural community members and smallholder farmers to discuss both progress and obstacles in accessing financial services. Greater financial inclusion is critical for small producers to engage in agro-processing and value chain development, as commercial banks often perceive them as 'too risky' for loans. Globally, 70 percent of poverty is rural; smallholder farmers are the largest group of working poor, and they are mostly excluded from formal financial systems. This is especially true for women and youth, who often face additional legal and policy barriers to accessing financial services, as well as disproportionate obstacles to training and information.

The UNSGSA and the heads of FAO, IFAD and WFP chose Ethiopia and Tanzania as two of the pilot countries for joint, country-level initiatives on food security, rural development and financial inclusion, due to the strength of those countries' existing programmes, their agricultural and rural needs, government commitments to financial inclusion, and opportunities for joint work.

Visiting Tanzania, the UN delegation emphasized that access to financial services will help the benefits of the country's economic growth reach poor people, create employment and encourage personal and social development. They praised the country's commitment to improving financial inclusion, and said that with committed leadership and political support, there is much potential for scaling up access to diverse financial services for rural poor households, especially small-scale farmers.

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