Agriculture is the backbone of Tanzania’s economy, as the largest single sector, contributing 29% (2016)[1] to the country’s GDP. Access to finance is a key factor in the continued growth of this economy, yet both smallholder and agribusiness finance continue to be considered high risk by the financial community. This has hampered the development of financial services and products suited to agriculture and limited penetration of micro-finance and formal bank finance in rural areas.
Evidence shows that overall take-up of formal financial services is lower than the national average. With the potential economic contribution that the agricultural sector offers and the need for sound financial management to achieve growth, it is significant that, aside from mobile money, under a fifth of agri-business owners use banking, savings, credit and insurance services. It is clear that products need to be better tailored to the demands of agriculture in terms of required conditions and collateral. With low awareness and knowledge of the benefits of financial services among the agricultural sector, marketing and access to clients is also crucial.