Release date: 21 December 2022
Promoter – Financial Intermediary
KCB BANK TANZANIA LTDLocation
Description
This facility aims to provide financing to KCB Bank in Tanzania for onward lending to private sector entities, mostly small and medium sized enterprises, with a particular focus on women owned or managed businesses. It is envisaged that the operation will benefit from an EU grant to finance a partial portfolio guarantee as well as technical assistance.
Additionality and Impact
The operation concerns financing to KCB Tanzania (KCBT), a financial intermediary (FI) in Tanzania, for on-lending to eligible small and medium-sized enterprises (SMEs) and MidCaps with a focus on women owned and/or managed businesses and enterprises operating in the Tanzanian economy. As such, it will tackle the long-standing credit constraints for SMEs, by improving access to credit and tailoring loan terms to the specificities of women led businesses in the economy. It is envisaged that the operation may benefit from potential EU financial support including technical assistance which will address certain gaps and constraints limiting access to finance by SMEs operating in these underserved segments. Under the operation, FIs will be able to access credit lines in both foreign (USD, EUR) and potentially local currency (TZS). The credit line will carry longer tenors than commonly available in Tanzania, thereby supporting KCBT to diversify and stabilise its funding structure while ensuring final beneficiaries' access to financing that matches the economic life of the underlying assets. The operation will benefit from EIB's gender technical expertise and financial structuring.
The operation will contribute to addressing the market failure of imperfect/asymmetric information and will provide positive externalities. Through its thematic themes, the operation will help increase resilience of local communities as well as contribute to gender equality. The project responds to a number of specialized national policies and planning frameworks (incl. a focus on gender) which are at the heart of the development and political agenda in Tanzania. The project is under the auspices of the EU's external action, the Neighbourhood, Development and International Cooperation Instrument (NDICI) and is aligned with the country's National Development Vision for 2025 and its implementation plan as well as the EU Multiannual Indicative Program for the period 2021-2027. It will also contribute to several Sustainable Development Goals.
Objectives
Financing of small/medium projects carried out by small and medium sized enterprises and mid-caps.
Sector(s)
- Credit lines - Credit lines
Under Global Europe NDICI guarantee
Under EFSD+ Guarantee
Proposed EIB finance (Approximate amount)
EUR 20 million
Total cost (Approximate amount)
not applicable
Environmental aspects
Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.
Procurement
Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.
Status
Signed - 21/02/2023
Disclaimer
Before financing approval by the Board of Directors, and before loan signature, projects are under appraisal and negotiation. The information and data provided on this page are therefore indicative.
They are provided for transparency purposes only and cannot be considered to represent official EIB policy (see also the Explanatory notes).