PASS, EQUITY BANK INK DEAL TO IMPROVE AGRO-PROCESSING "Credit News 24"
Under the pact inked here yesterday, Pass will establish a credit guarantee fund (CGF) to enable Equity Bank to lend its money to small and medium-size enterprises involved in agro-processing.
The agreement brings to 12 the number of banks that the trust works with.
The CGF, equivalent to or more than expected leverage of guaranteed investments, may be invested into the bank’s products or through low risk liquid instruments with varying tenures to enable Pass anticipates and meets claims against its guarantees.
Dar es Salaam. Private Agricultural Sector Support (Pass) Trust and Equity Bank Tanzania have signed a deal.
Under the pact inked here yesterday, Pass will establish a credit guarantee fund (CGF) to enable Equity Bank to lend its money to small and medium-size enterprises involved in agro-processing.
The agreement brings to 12 the number of banks that the trust works with.
The CGF, equivalent to or more than expected leverage of guaranteed investments, may be invested into the bank’s products or through low risk liquid instruments with varying tenures to enable Pass anticipates and meets claims against its guarantees.
The fund, besides creating the investment income for Pass Trust, will also serve as a pool of cash from which Pass Trust settle claims against its various guarantee products.
“Pass and Equity Bank Tanzania Limited agree to fully cooperate in the execution of this financing scheme to ensure objectives of the programme are successfully accomplished,” reads the agreement.
The pact provides for Equity Bank to designate one of its senior members of staff to handle the Pass portfolio in the bank, with the views of enhancing loan processing administrative efficiency.
“We are delighted by the signing of this deal...it will amplify our efforts to reach as many small and medium sized entrepreneurs in the agriculture sector as possible,” Pass managing director Nicomed Bohay said in his address.
Mr Bohay said the trust remains committed to supplementing the government’s industrialisation drive by encouraging and supporting prosperous agro-processing sector, technically and financially.
Pass Trust works with farmers and livestock keepers for whom it writes business plans, before linking them to commercial banks for loans, which it also guarantees.
The trust, operating as a service provider between agricultural and financial sectors has so far guaranteed over Sh400 billion loans to the sector, with loan recovery rate of 95 per cent.
Pass was established in 2000 to stimulate investment and growth in commercial agriculture and related sectors.
The Citizen
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