State supports small manufacturers with 2.4bn/- rescue kit

The funds are expected to help stimulate growth of small manufacturing industries throughout the country.

SIDO Director General (DG) Omar Bakari (pictured) told Smart Money that the funds have been approved by the government for the 2016/2017 financial year.

The funds will be channelled to the National Entrepreneurship Development Fund (NEDF) to help SMEs engaged in manufacturing sector access loans, stimulate economic growth, increase income, create jobs and contribute to the improvement of the people’s wellbeing in general.

Expressing gratitude to the government for boosting NEDF financially to able to issue credit to small and medium enterprises engaged in manufacturing sector, he said:

“The government has decided to provide funds after realising that demand is huge, especially for SMEs engaged in manufacturing and the funds that SIDO receive from the government is not enough to support all SMEs in the country.

This is a new loan package that will focus SMEs engaged in manufacturing sector and during the implementation the loans will be offered to them in accordance with their needs.

The government has decided to empower NEDF to motivate entrepreneurs stimulate growth of small industries and assist SIDO to facilitate SMEs access to finance across the country.

“At the moment we are waiting for NEDF Steering Committee to discuss on how SIDO will begin to use the funds to issue credit to small and medium enterprises so that they can benefit from it,” he said.

For many years SIDO has been talking to various financial institutions to see how they can support MSMEs to get funds that will help them implement planned activities or projects. Loans offered by SIDO to SMEs engaged in manufacturing who will range from 6m/- to 50m/-.

He called on small and medium entrepreneurs keen to access loans for their businesses to visit SIDO at their offices because the government has already allocated the funds through NEDF. According to the DG, the current interest rates charged on loans is 18 percent per annum for production projects and 22 percent per annum for non- production projects being funded under NEDF.

He said 18 percent targets manufacturing sector while 22 percent targets traders.
SIDO will provide suitable packages for these people because limited access to loans and capital is the major impediment hindering MSMEs to operate their businesses effectively, he said.

On the other hand, SIDO will ensure they get affordable loans because for many years high borrowing interest rates charged on loan facilities has caused many entrepreneurs to fail to access loans from financial institutions because they don’t have collateral to support them to access funds for the purchase of appropriate equipment.

He called on all micro, small and medium entrepreneurs engaged in manufacturing sector to use this opportunity because SIDO will introduce suitable packages for them after identifying that limited access to finance is seriously undermining the survival and growth of MSMEs.

Effective delivery of these services will ensure business growth, promotion of quality services and products, increased efficiency, high productivity, capacity building for employment creation, income generation and ultimate improved wellbeing in the urban as well as rural areas.

According to the DG, SMEs get loan facilities for investment and working capital through both groups and individuals. SIDO has been working with SMEs for over four decades now and it has been practically proved that growth and competitiveness hinges on effective delivery of capacity development services.

This is mainly done through facilitation to impart skills, attitude and knowledge by providing among other things, training, business management, consultancy and extension services. NEDF started operations in 1994 by providing loans to entrepreneurs throughout Tanzania and is operating under SIDO.

The main objective of the fund is to provide credit to small industries and small and medium enterprises so as to eradicate poverty through designing and implementation in three economic sectors. Since 1994 up to 2014/2015 a total of 4.05bn/- in loans has been disbursed.