The European Union (EU) has signed an agreement with the Financial Sector Deepening Trust (FSDT) aimed at issuing a grant worth 4 million Euros (11.23bn/-) for promoting entrepreneurship and enhancing economic inclusion in the country.
The funds under the FSDT will be used to finance women and youths who run Small and Medium Enterprises (SMEs) focusing on blue economy and green sustainable projects such as clean cooking, fishing and other eco-friendly businesses.
The signing of the contract yesterday was part of the information session organized by EU in Dar es Salaam to empower SMEs with concrete guidance on the available financing instruments such as grants, loans, equity and the process of accessing the resources.
Shortly after the signing, Head of Cooperation for the EU Delegation to Tanzania, Mr Cedric Merel said the contract highlights EU commitment on fostering financial inclusivity by enabling youths and women participate in sustainable projects which are critical in containing persisting climate change effects while creating jobs.
He said apart from the existing favourable business environment in the country, SMEs require finance so as to implement various sustainable projects. "A conducive business environment is essential for businesses to thrive, and finance is their lifeblood.
By supporting SMEs, we target the main job provider more specifically to support green activities that are socially and environmentally clean and sustainable" he said.
Mr Merel said the EU has been providing a 360-degree approach to investments in Tanzania by enhancing domestic resources mobilization, strengthening Capital Markets as well as fostering green and alternative finance.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
He noted that last year the EU as the result of Tanzania-EU Business Forum is- sued a credit line worth about 400 million US dollars (over 1tri/-) which will be pro- vided to commercial banks such as CRDB, NMB and KCB and later on finance the SMEs and the private sector at large.
For his part, Head of the Regional Hub for East Africa at the European Investment Bank (EIB), Mr Edward Claessen said that in 2023, Tanzania was the largest recipient of EIB support in Sub-Saharan Africa, with 758bn/- in new investments to support businesses through partnerships with the local banks such as CRDB, NMB, and KCB-Tanzania.
Tanzania Private Sector Foundation's (TPSF) repre- sentative, Mr Gasper Mdee said financial opportunities offered by the EU will foster a booming entrepreneurial ecosystem in the country.
"In partnership with the local private sector or- ganisations, the EU ensures that diverse segments of the population, including underrepresented groups such as women and youths, have access to the resources they need to succeed," Mr Mdee said.
Earlier, Bank of Tanzania's (BoT) Director of Financial Deepening and In- clusion, Mr Kennedy Komba said the SMEs makes 90 per cent of businesses in the country in which they contribute five per cent of Gross Domestic Product (GDP) and employ five million people.
However, Mr Komba noted most businesses in the country fall short in after their first years of operation due to, among others, lack of financial management skills among entrepreneurs.
