DAR ES SALAAM, Tanzania – The African Development Bank Group (AfDB) has approved a $10 million trade finance guarantee facility for Exim Bank Tanzania, a strategic move expected to unlock up to $60 million in trade transactions and significantly enhance financing access for small and medium enterprises (SMEs) and local corporations.
The facility, approved in late September 2025, will provide crucial support to Tanzanian businesses engaged in both intra-African and international trade, particularly targeting key sectors including agriculture, manufacturing, and healthcare.
Addressing Tanzania’s Trade Finance Gap
The initiative directly confronts Tanzania’s significant trade finance challenge, where businesses face an estimated $1.3 billion annual financing gap. This shortage has historically constrained the growth potential of local enterprises, particularly SMEs that constitute over 90% of Tanzanian businesses and contribute approximately one-third to the country’s GDP.
“This partnership with Exim Bank Tanzania demonstrates the African Development Bank Group’s commitment to reducing Tanzania’s trade finance gap, empowering local businesses to compete globally and create more jobs across the country,” stated Lamin Drammeh, AfDB’s Head of Trade Finance.
Mechanism and Expected Impact
The facility operates by providing up to 100% guarantees to international confirming banks against the risk of non-payment for Letters of Credit issued by Exim Bank Tanzania. This mechanism will enable the bank to expand its trade finance operations while reducing reliance on foreign exchange collateral, thereby freeing up resources for increased lending to local businesses.
Exim Bank Tanzania Chief Executive Officer Jaffari Matundu emphasized the transformative potential of the facility: “SMEs and corporates are vital engines of industrialization, innovation, and job creation. This facility will remove barriers to cross-border trade while opening doors for new partnerships with global and regional financial institutions.”
Strategic Alignment and Sectoral Benefits
The project aligns with multiple development frameworks, including the African Development Bank’s 2024–2033 Ten-Year Strategy, the 2021–2025 Tanzania Country Strategy Paper, and the government’s Tanzania Vision 2025. These frameworks collectively prioritize improving private sector access to finance and promoting job creation through enhanced trade competitiveness.
Key sectors expected to benefit include agriculture, through imports of fertilizers and exports of commodities like coffee, cashew, and cotton; healthcare, through imports of pharmaceuticals; and manufacturing, through equipment imports that will enhance local production capacity.
The three-year facility represents a significant step toward strengthening Tanzania’s position in regional and global trade networks while supporting the country’s broader economic development objectives.
Sources:
African Development Bank Approves USD 10 Million to Support SMEs and Local Corporates – TanzaniaInvest
https://www.tanzaniainvest.com/finance/banking/afdb-trade-finance-guarantee-exim-bank-support-smes
