Tanzania: Sh10 billion up for grabs by small businesses

By Alawi Masare, The Citizen

Oikocredit Tanzania yesterday disbursed loans amounting to Sh10 billion to 12 local microfinance institutions as part of its efforts to provide funds that have a positive impact on society.Oikocredit is an international cooperative financial institution that offers loans or investment capital to microfinance institutions, cooperatives, fair trade organisations and small and medium-sized entrepreneurs that is active in 80 developing countries.

In turn, these microfinance institutions provide loans to individual entrepreneurs and small businesses that have no or limited access to commercial banks.

In Tanzania, Oikocredit has approved over Sh36 billion since it became operational in 2006. Its Country manager, Mr Deus Manyenye, said over 400,000 Tanzanians have benefited from the loans so far.

The institutions that received dummy cheques yesterday with the respective amount in brackets include Victoria Sacco Ltd (Sh500 million), Mkoa Sacco Ltd (Sh1 billion), Tandale Market Traders Sacco Ltd (Sh450 million), Foot Loose (T) Ltd (Sh4.5 billion), Karagwe Women Saccos Ltd (Sh100 million) and Evangelical Lutheran Church in Tanzania – Eastern and Coastal diocese (Sh722 million).

Others are Women Advanced Trust Saccos Ltd (Sh591 million), Better Life for Tanzanians Trust Fund (Sh300 million), Mabatini Saccos (Sh500 million) and Kitunda Saccos Ltd (Sh600 million).

Speaking after presenting the dummy cheques to representatives of the institutions, the acting director of the Cooperatives Department in the Ministry of Agriculture, Food Security and Cooperatives, Ms Restituta Kahewaga, commended Oikocredit for its efforts in empowering disadvantaged people through its alternative source of funds.

“Oikocredit is committed to changing the lives of Tanzanians. The recipient institutions must also look for better ways of utilising the money by applying professional standards and the knowledge they get from Oikocredit through capacity building programmes,” said Ms Kahewaga.

The managing director of Better Life for Tanzanians Trust Fund, Ms Hellena Lutenge, said they were impressed by the efforts made by Oikocredit in facilitating their businesses.

“We managed to construct a one storey building since we started receiving loans from Oikocredit. Today, it is the second time we are receiving,” she said.

The director general of the Cooperative Audit Supervision Corporation (Coasco), Mr Severine Mosha, advised the Saccos to make sure they employ financial professionals and apply international financial standards in their audit systems.“Get ready to pay the professionals using the profits you get. They will help in making sure of proper utilisation of the money you have,” he said.

There had been concern by the participants that most microfinance institutions lacked professionals.
As a way of reducing the cost of sending money abroad during repayment, Oikocredit will soon have its local bank account which recipient institutions will use to repay their loans. Currently, its account is in The Netherlands.

Mr Manyenye told the representatives of microfinance institutions at Blue Pearl yesterday that the process of registering the local account started since August and was expected to be completed early next year.

“We have done about 85 per cent of the process of registering the local account and probably it will be completed come next January. It is a long process which needed various signatories, including one from the State House,” said Mr Manyenye.

The beneficiary institutions are compelled to send the money abroad through commercial banks which they say is very expensive and takes too long.The chairman of Wanama Saccos at Manzese, Mr Yasini Bakari, said it was very expensive to send money through commercial banks.

“It can cost about Sh2 million to send Sh10 million abroad,” he said.Although there are lending rates, Oikocredit offers loans to microfinance institutions, cooperatives and SMEs at lower rates for long term ones.

“Our lending rates are currently between 13 and 14 per cent and an institution can pay for six to 12 years,” said Mr Manyenye.

Tanzania: Oikocredit opens doors to property developers

By Ally Hamisi, East African Business Week

Oikocredit Tanzania,  has announced to set aside Tsh15 billion (US$9.58 million) for 14 projects which will be undertaken in this financial year.

According to Oikocredit, property developers, financial institutions, agriculture sector and SMEs were invited to apply for the loans of up to 5 million Euros ($7million) for construction of cheaper houses for sale to people struggling to own decent homes.

Oikocredit is one of the world’s largest sources of private funding to the microfinance sector. They provide credit to trade cooperatives, fair trade organizations and small-to-medium enterprises (SMEs) in the developing world. Speaking to the East African Business Week in Dar es Salaam last week, the firm’s Country Manager, Mr. Deus Manyenye said, they will start lending to property developers who will in turn give credits to local families.

“Let’s help people get their own decent houses through provision of affordable loans,” said Mr. Manyenye. Manyenye added, that 14 projects which targeted for this year will work to benefit over 120,000 individuals in Tanzania.

Oikocredit in Tanzania started in 2006 and accounts for 22 per cent of Oikocredit in East Africa which started in 1995 in Kenya . Uganda accounts for 28 per cent of the portfolio while Rwanda has just joined with EUR 200,000 allocation made last year.

Oikocredit is active in over 70 developing countries through a network of eight regional offices, including East Africa . It has managed to reach out to 28 million people in the world through loans, credit lines and equity investments in microfinance institutions (MFI).
The Netherland financial dealer continues to invest in measuring social performance and has established created a new department entirely focused on social performance management.

The Netherlands based global development finance is gearing towards empowering disadvantaged people with credit. In Tanzania, a total of Tsh26 billion has been approved for lending since it commenced operation in the country in 2006.

Oikocredit has so far benefitted community banks, microfinance institutions cooperatives, NGOs, churches, fair trade organizations as well as small and medium scale entrepreneurs (SMEs), said Mr. Manyenye.

Rev. Dr. Fidon Mwombeki said they understand the fact that these institutions do not want to apply for loans from commercial banks for fear they would be unable to make the repayments.