More than 50 per cent of MRCB loans were provided to SME,the reason why it was imperative for the bank to join guarantee scheme.

The scheme allows for SMEs to access business financing, like partially unsecured loans for already established SMEs with some track record.

According to the MRCB’s Managing Director Abby Y. Ghuhia, both his SME clients and shareholders would benefit from the decision to join the scheme.

Mwanga Rural Community Bank (MRCB) has been earmarked as one of the local small banks that would manage the 21bn/- empowerment fund.

He said also Credit Guarantee Scheme for Small and Medium Enterprises will achieve the objective of rural financing as envisioned by the current administration.

Since agriculture was an important for Tanzania,contributing about 45-to-46 per cent to the GDP, Ghuhia said lending to agriculture in production and marketing constitute about 20 per cent of MRCB’s total credit portfolio, he said.

In another development, MRCB also announced third quarter results showing that bank’s loans and advances have dramatically increased by more than five times for the past three years.

About 218m in loans were advanced to clients 2003, but as of September this year, it had jumped up to 1.3bn.

The more than 50 per cent of MRCB loans were provided to SME.

Deposits went up by more than three times over the same period Net profit before tax increased by 80 percent from 45m in 2003 to 81m as at December 2005 as at the end of last quarter which ended September 2006 MRCB recorded cumulative profit before tax of 60.

However, among the challenges that his bank face include lack of vibrant economic activities in the area, coupled by a low per capita income.

"The district has low savings growth which affects our deposit growth as compared to credit demand. Also, we face stiff competition with other financial institutions," he noted.

Source: IPP Media