Program Description:

The Feed the Future Tanzania Agri Finance Project is an access to finance project working to improve access to finance for smallholders, women, youth, and micro, small, medium (including large) enterprises (MSMiLs) in Tanzania by improving the agri-finance ecosystem and strengthening the capacity of both borrowers and lenders. The Feed the Future Tanzania Agri-Finance Project will prioritize interventions that increase availability and adoption of priority technologies, including climate-smart technology, and create more inclusive agricultural finance ecosystems, enable expanded and sustained lending and investment, and increase productivity and incomes.

Project interventions will support 20 financial institutions, 15 demand-side institutions including agricultural enterprises and women and youth groups, train 300 financial institution staff, and reach 18,000 borrowers with $21 million in agricultural finance facilitated in Tanzania. The Feed the Future Tanzania Agri-Finance Project will utilize a system-driven, private sector-led approach to target agricultural market coordination failures and develop commercially oriented solutions that will sustain and scale agri-financing. The project includes two interconnected strategic objectives to achieve tangible, positive impact for smallholder farmers, women, youth, agro-enterprises, and financial institutions.

Objective 1: Improve income and bankability of smallholders, women, youth and micro, small and medium (including large) enterprises.  

The Feed the Future Tanzania Agri-Finance Project will deliver targeted technical capacity strengthening and direct training and coaching to smallholders, women, youth, and MSMiLs beneficiaries in financial and money management skills and tools, business planning, finance and investment, development of business funding proposals, records keeping, loan applications, and loan repayment and/or savings strategies.

Objective 2: Strengthen financial institution operational capacity to expand agri- lending. 

The Feed the Future Tanzania Agri-Finance Project will provide targeted support to supply side financial institutions to develop new agri-finance products and improve operational capabilities and efficiencies, build capacity and strengthening their motivation to expand agri-lending to smallholders, women, youth, and MSMiLs – with a focus on priority and climate-smart technologies such as irrigation, inputs, storage, and value addition. The Feed the Future Tanzania Agri Finance Project is an access to finance project working to improve access to finance for smallholders, women, youth, and micro, small, medium (including large) enterprises (MSMiLs) in Tanzania by improving the Agri finance ecosystem and strengthening the capacity of borrowers and lenders. With a particular emphasis on priority technologies, including climate- smart technologies. The Feed the Future project is working to create more inclusive agricultural finance ecosystems, enable expanded and sustained lending and investment, and increase productivity and incomes. The Recipient interventions will increase supported financial institutions from 9 to 20, train 300 financial institution staff, and reach 18,000 borrowers with $21 million in agricultural finance. The project will utilize a system-driven, private sector-led approach to target agricultural market coordination failures and develop commercially oriented solutions that will sustain and scale agri-financing.

Problem Statement:

The lack of proper lending tools, credit standards for borrowers and counterparties, appropriate underwriting standards, and proper portfolio risk management prevent financial institutions from deploying more credits to people and businesses in Tanzania, particularly youth and women. Until recently, many financial institutions experienced high nonperforming loans resulting mainly from a lack of suitable lending tools and practices to identify, mitigate, and reduce risks. This leaves most stakeholders in the economic sector underfinanced, particularly smallholder farmers, youth and women underfinanced, despite their significant contribution to the nation’s economy and food security.

One government agency in Zanzibar has been providing loans to individuals, businesses, and groups to ensure Zanzibaris have access to the capital needed to grow, sustain, and operate their businesses profitably. It wants to improve its financing and lending tools, procedures and practices to manage the credit risk environment; operate under a sound credit grading process; maintain appropriate credit administration, measurement, and monitoring processes; ensure adequate controls over credit risk in financing; and improve portfolio management. In addition, the government agency wants to build the capacity of its staff and management to expand lending. This capacity building will allow the government agency to adopt, customize and develop more lending tools, procedures, practices, and loan products to help the agency penetrate the new market segments including the agriculture sector.

Therefore, the Feed the Future Tanzania Agri Finance Project is recruiting a local volunteer expert to provide support and technical inputs to the government agency in Zanzibar to review and develop lending tools, procedures and practices. Furthermore, the volunteer expert will support the design of a risk and loan underwriting matrix, and tools for risk detection and credit issue identification. The volunteer will provide tailored training to build the capacity of the government agency management and staff to expand its lending activities. This capacity building will allow the government agency to adopt, customize, and develop more lending tools and procedures, and penetrate new market segments, including the agriculture sector.

Objectives of the Assignment:

1. Review the governmentagency’sexisting lending tools, procedures, loan processes, and underwriting standards.
2. Work with the government agency staff to design,redesignand improve lending tools, procedures, loan processes, and underwriting standards based on the findings to help manage the credit risk environment and operate under a sound credit grading process.
3. Provide in-class and on-the-job training tothegovernment agency staff and management to help the agency adopt, customize, and develop appropriate lending tools, processes, procedures, and loan products on an ongoing basis to meet customer needs and to maintain a sound lending portfolio.