Tanzania Secures $60 Million AfDB Loan to Boost Agricultural Financing and Rural Jobs

Agriculture remains Tanzania's most important economic sector, employing approximately 65% of the workforce and contributing nearly a quarter of the country's economic output.

Tanzania is set to expand financial support for farmers and agricultural businesses following the approval of a $60 million loan from the African Development Bank Group to strengthen the Tanzania Agricultural Development Bank (TADB). The funding, approved on 21 October 2026, will increase the bank's ability to provide affordable, longer-term financing to farmers, entrepreneurs and agricultural enterprises facing difficulties accessing traditional banking services. The investment is expected to support job creation, improve agricultural productivity and expand economic opportunities for women and young people across the country.

The financing forms part of the third phase of the TADB Equity Enhancement Project, a $120 million initiative designed to strengthen agricultural financing and support Tanzania's economic development. The African Development Bank's $60 million loan will be channelled through the Ministry of Finance and the Office of the Treasury Registrar before being invested as equity in TADB. The Government of Tanzania will contribute another $60 million through the capitalisation of eligible retained earnings, increasing the development bank's financial capacity to support agricultural businesses.

Agriculture remains one of Tanzania's most important economic sectors, employing approximately 65% of the workforce and contributing nearly a quarter of the country's economic output. Despite its importance to employment and national income, the sector receives only around 12% of private sector credit, leaving many farmers and agricultural businesses struggling to secure suitable financing. The World Bank estimates are not cited in the announcement, but the African Development Bank identifies an annual agricultural financing gap of approximately $1.5 billion, with women and young entrepreneurs facing particularly difficult barriers to accessing capital.

Expanding Agricultural Loans to Support Farmers and Businesses

Limited access to affordable finance has restricted agricultural development in Tanzania, particularly for farmers and entrepreneurs who cannot provide sufficient collateral or obtain long-term credit. Financial institutions often consider agricultural lending risky because of unpredictable harvests, market fluctuations and limited financial security, making it difficult for businesses to invest in equipment, irrigation systems and modern production methods. Strengthening TADB's capital base will allow the institution to offer larger loans with longer repayment periods, helping agricultural enterprises secure funding that better matches their investment needs.

The additional capital will support direct lending to farmers and agribusinesses, alongside wholesale financing and co-financing arrangements with commercial banks and other financial institutions. These partnerships are expected to increase the availability of agricultural credit and encourage more financial institutions to support businesses operating throughout the agricultural value chain. Ahmed Attout, Director of the African Development Bank's Financial Sector Development Department, emphasised that agriculture plays an important role beyond food production by creating employment, supporting businesses and improving livelihoods for millions of Tanzanians.

Women and Young Entrepreneurs to Receive Greater Financial Support

The third phase of the project places particular emphasis on expanding economic opportunities for women and young people, who frequently experience greater difficulties obtaining agricultural loans. At least 30% of the jobs supported by the project are expected to benefit women, with another 30% targeting young people through agricultural businesses and related economic activities. These employment targets reflect the importance of making agricultural financing more inclusive and ensuring that investment reaches groups facing persistent barriers to economic participation.

By 2030, TADB plans to increase financing for women-owned enterprises to 30% of its lending portfolio, strengthening their ability to expand businesses and participate in agricultural value chains. Financing for youth-led businesses is expected to reach 20% of the bank's portfolio, providing greater opportunities for young entrepreneurs seeking to establish or expand agricultural enterprises. Improved access to capital could support business growth, encourage investment in modern farming practices and generate employment opportunities in rural communities where agriculture remains a major source of income.

Climate-Smart Agriculture to Strengthen Productivity and Rural Livelihoods

The new financing will also support climate-smart agricultural investments, including efficient irrigation systems, renewable energy solutions, improved storage facilities and technologies designed to reduce crop losses. These investments could help farmers manage agricultural production more efficiently, reduce losses after harvesting and strengthen their ability to cope with changing environmental conditions. TADB expects climate-smart agricultural loans to account for 12% of its portfolio by 2030, compared with just 3% in 2025, representing a substantial expansion in financing for more sustainable farming practices.

TADB Managing Director Frank Nyabundege described agriculture as the foundation of Tanzania's economy and an essential source of livelihoods for millions of people across the country. He explained that the additional capital will strengthen the bank's ability to provide inclusive and sustainable financing, helping farmers and agricultural businesses contribute more effectively to national economic development. The investment also supports Tanzania's Development Vision 2050, known as Dira 2050, which identifies agricultural transformation and inclusive economic growth as important national development priorities.

The third phase builds on earlier African Development Bank support that has helped TADB expand agricultural lending and improve access to financial services in underserved communities. The initiative also aligns with the African Development Bank Group's Four Cardinal Points strategic vision, particularly its priorities of expanding access to capital, creating employment and strengthening climate-resilient agricultural systems. By directing additional financing toward farmers, women-owned enterprises, youth-led businesses and climate-smart agriculture, the project could help Tanzania develop a more productive agricultural sector and create sustainable economic opportunities for communities across the country.