The DEG loan to the CRBD bank will use a guarantee from the European Fund for Sustainable Development Plus, and will support small businesses including those owned by women and young adults.
DEG, the German development finance institution, is providing Tanzania’s Cooperative Rural Development Bank (CRBD) with a long-term loan of $50m (€43m), which will provide funding for small businesses, including those owned by women and young adults.
The DEG financing will use a guarantee from the European Fund for Sustainable Development Plus (EFSD+), which secured $10m of the loan.
The initiative aligns with key UN Sustainable Development Goals (SDGs), particularly, SDG 1 – Poverty reduction, SDG 5 – Gender equality, and SDG 8 – Decent work, according to DEG.
As part of the European Union’s Global Gateway Initiative, created by the EU to invest in infrastructure projects worldwide, the EFSD+ aims to intensify cooperation with the private sector and enable projects that are particularly relevant to development policy.
Abdulmajid Nsekela, the chief executive officer of CRDB Bank, said: “At CRDB Bank, we believe that empowering women and youth is a strategic investment in the future of our nation and the region.
“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,” Nsekela said.
Small businesses are a key part of the Tanzanian economy, employing more than five million people and creating local income. However, few of these businesses have access to formal financing, according to DEG. The investment aims to help close the financing gap.
DEG has been working in East Africa for over 60 years helping support new businesses directly on the ground through its subsidiary, DEG Impulse.
One way it does this is by providing funding to fintech and mobile payment startups in Tanzania through the develoPPP Ventures programme, to make financial services more accessible and support financial inclusion for more people.
In its 2024 Development Report the DEG highlights the ways it has helped private companies in developing and emerging markets become more resilient amid global challenges such as climate change and geopolitical instability. Last year, DEG’s portfolio companies supported around three million jobs and produced enough green electricity to power 49 million people, according to the report.
