Tanzania bank urges farmers to use formal loans, warns against predatory lenders

The Tanzania Agricultural Development Bank (TADB) is encouraging farmers across the nation to leverage official loan opportunities provided by financial institutions to enhance their productivity and income. This initiative aims to steer farmers away from informal lending practices, often referred to as 'kausha damu' (bloodletting), which can lead to severe financial distress.

Frank Nyabundege, TADB's Executive Director, highlighted the bank's achievements over the past decade. He stated that TADB has been instrumental in transforming agriculture from a subsistence activity into a profitable business. "We have been reaching out to farmers in villages to deliver our services. However, sometimes challenges arise because some farmers seek shortcuts for quick money, which later causes significant problems," Nyabundege explained.

Over the last 10 years, TADB has significantly expanded its financial capacity, growing its assets to 1.3 trillion Tanzanian shillings as of 2025, a substantial increase from its initial capital of 60 billion shillings in 2015. The bank now operates through eight regional offices and additional district offices nationwide, ensuring accessibility for farmers.

Through direct agricultural lending, TADB has facilitated loans totaling 5.8 trillion Tanzanian shillings. This financial support has boosted the country's crop production to 22.8 million tons, contributing to a surplus of approximately 30% above domestic needs. This surplus is exported, generating revenue for both farmers and the nation.

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We have been reaching out to farmers in villages to deliver our services. However, sometimes challenges arise because some farmers seek shortcuts for quick money, which later causes significant problems.