Grace Ashiru
DEG, the German development finance institution, is providing Tanzania’s Cooperative Rural Development Bank (CRDB) with a long-term loan of $50 million (€43 million) to support small businesses, including those owned by women and young adults. This financing will help address a significant gap in access to formal financing for small enterprises, which are vital to the Tanzanian economy.
The DEG loan is backed by a guarantee from the European Fund for Sustainable Development Plus (EFSD+), which has secured $10 million of the total loan amount. This collaboration aligns with several key UN Sustainable Development Goals (SDGs), specifically SDG 1 (Poverty Reduction), SDG 5 (Gender Equality), and SDG 8 (Decent Work). The financing initiative supports local economic development by enabling small businesses to access critical funding, with a focus on inclusivity and sustainable growth.
The EFSD+, part of the European Union’s Global Gateway Initiative, seeks to foster infrastructure projects worldwide. It works to deepen cooperation with the private sector and enable projects that align with the EU’s development policy objectives. By supporting initiatives like this, the EFSD+ aims to advance both social and economic development in key regions.
Abdulmajid Nsekela, the CEO of CRDB Bank, emphasized the importance of empowering women and youth in driving the future of the country and region. He said, “Through our partnership with DEG and the support of the EU guarantee, we are scaling up our efforts to provide inclusive financial solutions that unlock potential, nurture innovation, and drive sustainable growth. When we finance a dream, we do more than fund a business – we uplift families, transform communities, and build a resilient economy for generations to come.”
Small businesses play a crucial role in Tanzania’s economy, providing employment to over five million people and contributing significantly to local income. However, many of these businesses struggle to access formal financing, which has created a critical gap that this investment seeks to address.
DEG has been supporting businesses in East Africa for over 60 years, providing funding and expertise directly to the ground through its subsidiary, DEG Impulse. One of the ways DEG is helping boost financial inclusion is through its develoPPP Ventures programme, which funds fintech and mobile payment startups in Tanzania. These efforts aim to make financial services more accessible, particularly for underserved populations, and promote broader financial inclusion.
In its 2024 Development Report, DEG highlights the positive impact of its work in emerging markets, especially in helping companies navigate global challenges like climate change and geopolitical instability. In 2023, DEG’s portfolio companies supported approximately three million jobs and generated enough green electricity to power 49 million people, reinforcing the institution’s commitment to sustainable economic development.
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