Financing Value Chains a Case of Crdb Bank Plc
“DEVELOPING AND FINANCING EFFECTIVE AGRICULTURAL VALUE CHAINS”
Experience from CRDB Bank Plc
Samson Keenja, CRDB Microfinance Services Company Limited,
Dar es salaam, Tanzania
INTRODUCTION
Agriculture is the leading economic sector in Tanzania, providing a livelihood to 80% of the population. It is the primary source of food and raw materials accounting for 50% of the GDP and a leading export sector. It remains important for achieving sustained growth, poverty reduction and rural development.
Agriculture in Tanzania is dominated by smallholder farmers (peasants) cultivating an average farm sizes of between 0.9 hectares and 3.0 hectares each. About 70 percent of Tanzania’s crop area is cultivated by hand hoe, 20 percent by ox plough and 10 percent by tractor. It is rain fed agriculture. Food crop production dominates the agriculture economy 5.1 million ha. are cultivated annually, of which 85 percent is under food crops.
The major constraints facing the Agriculture sector includes.
1. The falling labour and land productivity due to application of poor technology.
2. Dependence on unreliable and irregular weather conditions. Crops are adversely affected by periodical droughts.
3. Unreliable markets for the farm produce, affected not only by the principles of demand and supply but also by the Government policies on food security.
4. Poor road infrastructure for supply of farm inputs and transportation of farm produce to the markets.
In Tanzania, most of production, processing and marketing functions have been assigned to the private sector. However despite efforts by the private sector in investing in processing of crops yet a substantial amount of crops are sold unprocessed including crops such as cashew nuts and cotton.
Agricultural value chains are becoming more complex over time due to change in the market environment driven by various factors among them being changes in demand, regulations, government policies and changes in lifestyles. As
Experience from CRDB Bank Plc
Samson Keenja, CRDB Microfinance Services Company Limited,
Dar es salaam, Tanzania
INTRODUCTION
Agriculture is the leading economic sector in Tanzania, providing a livelihood to 80% of the population. It is the primary source of food and raw materials accounting for 50% of the GDP and a leading export sector. It remains important for achieving sustained growth, poverty reduction and rural development.
Agriculture in Tanzania is dominated by smallholder farmers (peasants) cultivating an average farm sizes of between 0.9 hectares and 3.0 hectares each. About 70 percent of Tanzania’s crop area is cultivated by hand hoe, 20 percent by ox plough and 10 percent by tractor. It is rain fed agriculture. Food crop production dominates the agriculture economy 5.1 million ha. are cultivated annually, of which 85 percent is under food crops.
The major constraints facing the Agriculture sector includes.
1. The falling labour and land productivity due to application of poor technology.
2. Dependence on unreliable and irregular weather conditions. Crops are adversely affected by periodical droughts.
3. Unreliable markets for the farm produce, affected not only by the principles of demand and supply but also by the Government policies on food security.
4. Poor road infrastructure for supply of farm inputs and transportation of farm produce to the markets.
In Tanzania, most of production, processing and marketing functions have been assigned to the private sector. However despite efforts by the private sector in investing in processing of crops yet a substantial amount of crops are sold unprocessed including crops such as cashew nuts and cotton.
Agricultural value chains are becoming more complex over time due to change in the market environment driven by various factors among them being changes in demand, regulations, government policies and changes in lifestyles. As