USAID’s Development Finance Corporation Mobilizes Financing for Tanzanian Agriculture

Dar es Salaam, Tanzania – June 27, 2024 – USAID’s Development Finance Corporation (DFC) initiative is making a substantial impact in Tanzania by leveraging local financing to boost the agricultural sector. The program, which extends partial credit guarantees to encourage private lenders, aims to support under-served borrowers in new sectors and regions, thereby fostering economic growth and development.

Agriculture is a critical component of Tanzania’s economy, employing a significant portion of the workforce and contributing extensively to the nation’s GDP. However, access to financing has often been a major barrier for many agricultural entrepreneurs and businesses. USAID’s DFC initiative addresses this challenge by mobilizing $50 million in finance for the agriculture sector, with a maximum guarantee of $63.2 million. This initiative not only supports agricultural productivity but also promotes financial inclusion by enabling more individuals and businesses to access much-needed capital.

The DFC initiative collaborates with multiple financial institutions to extend credit to borrowers who might otherwise struggle to secure loans. This includes targeting key regions such as the Southern Agricultural Growth Corridor of Tanzania (SAGCOT) and Zanzibar, where agricultural potential is high but financial services are often limited. By providing these partial credit guarantees, the program mitigates the risk for lenders, making them more willing to extend credit to smallholder farmers and agribusinesses.

The impact of the DFC initiative is already visible. Numerous agricultural businesses have expanded their operations, adopted new technologies, and increased their productivity thanks to the financing they received. This, in turn, has led to job creation, improved livelihoods, and enhanced food security across Tanzania.

As the DFC initiative continues through 2023, it remains committed to supporting Tanzania’s goal of becoming a self-reliant, middle-income country by 2025. By facilitating access to finance, USAID is helping to unlock the economic potential of Tanzania’s agricultural sector and drive sustainable development.