Dubbed the Alliance for Inclusive Finance, the grouping plans to promote the sub-sector which plays a pivotal role in shaping the country’s economy.
The financial institutions include Akiba Commercial Bank, Access Bank, Asa International, DCB Commercial Bank, Finca Microfinance Bank and Letshego Bank, according to a statement issued by the Financial Sector Deepening Tanzania (FSDT) yesterday.
Other institutions are Mwanga Hakika Bank, People’s Bank of Zanzibar, TCB Bank, United Bank for Africa, Bank of Africa, NCBA and Maendeleo Bank.
The move supported by the FSDT is set to empower member institutions to increase access and usage of quality financial services for growth of women and youth, according to the statement.
The development of the alliance is a result of the MSMEs forum that was held here from November 23-25 this year.
The FSDT chief executive officer, Ms Pamela Shao, said, “Through the alliance, member institutions will access financial facilities and technical assistance to enable them to strengthen their MSMEs financial services provision.”
Member institutions, she added, will also have visibility through media channels to reach more unbanked MSMEs.
Going by the Tanzania Chamber of Commerce, Industry and Agriculture, MSMEs contribute up to 35 percent of Tanzania’s gross domestic product (GDP), and generate up to 40 percent of total employment.
Yet, access to affordable and relevant financing is among the major factors hindering their business growth.
With the right measures, the financial sector can play an important role in creating an enabling environment for the growth of MSMEs and enable financial institutions to serve this largely untapped market segment.
Mwanga Hakika Bank managing director Jagjit Singh said: “The alliance will enable us to find relevant financing solutions to better serve MSMEs, women and youth in particular.”
The group, he expounded, are currently seen as risky due the informal nature of their businesses.
“The formation of the Alliance for Inclusive Finance for MSMEs in Tanzania will create a brighter future for MSMEs, as well as financial institutions in Tanzania,” said Mr Singh.
“The growth of the MSME sector is the growth of the Tanzanian economy,” he added.
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