Ingotiates a $50 million financial contract to bolster entrepreneurial ventures spearheaded by women in Tanzania
The European Fund for Sustainable Development Plus (EFSD+) is making a significant impact in Tanzania by supporting small businesses, particularly those owned by women and young adults. This financial arm of the EU's NDICI – Global Europe program is designed to promote sustainable economic development by attracting private investment worldwide, including Africa.
One notable example of EFSD+'s efforts is the partnership between DEG, a German development finance institution, and Tanzania’s Cooperative Rural Development Bank (CRDB). DEG has extended a $50 million loan to CRDB, with $10 million of this loan guaranteed by EFSD+. This initiative targets small businesses, including women-owned and youth-led enterprises, aligning with UN Sustainable Development Goals on poverty reduction, gender equality, and decent work.
CRDB aims to empower women and youth by providing inclusive financial solutions that foster sustainable economic growth. Abdulmajid Nsekela, the CEO of CRDB Bank, stated that empowering women and youth is a strategic investment in the future.
Swedfund, Sweden’s development finance institution, has also joined the effort, providing a $10 million loan to Platcorp Holdings Limited, a microfinance company supporting micro, small, and medium enterprises (MSMEs) in Tanzania and neighbouring countries. Half of this loan was backed by an EFSD+ guarantee, aiming to close the financing gap for small businesses, many of which are owned by women and young adults, hence accelerating financial inclusion.
The EFSD+ initiative is not only mobilizing private sector investment but also reducing financial risks for banks to lend to underserved groups, fostering entrepreneurship among women and youth, and contributing to poverty reduction and inclusive economic development.
DEG has been active in East Africa for over 60 years, supporting new businesses through its subsidiary, DEG Impulse. The partnership between DEG and CRDB Bank aims to provide inclusive financial solutions that unlock potential, nurture innovation, and drive sustainable growth.
DEG also provides funding to fintech and mobile payment startups in Tanzania through the develoPPP Ventures programme, making financial services more accessible and supporting financial inclusion. The EFSD+ financing will secure $10 million of the loan, ensuring the success of this initiative.
The EFSD+ is part of the European Union's Global Gateway Initiative, created to invest in infrastructure projects worldwide. This initiative aligns with key UN Sustainable Development Goals, particularly SDG 1, 5, and 8, which focus on poverty eradication, gender equality, and decent work and economic growth.
In conclusion, the European Fund for Sustainable Development Plus is making a significant contribution to small businesses in Tanzania by mobilizing private sector investment, reducing financial risks for banks, and fostering entrepreneurship among women and young adults. This initiative is a step towards poverty reduction and inclusive economic development in Tanzania.
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