Tanzania’s private sector is predominantly made up of informal, small enterprises unable to access finance to grow their businesses, as they lack the necessary formality and collateral required by commercial banks. EFTA seeks to use financial leasing to boost employment levels and business growth opportunities for the “missing middle”. By lending in Tanzanian shillings, implementing a zero collateral approach, using alternative credit assessment methods and standardising investment appraisals, EFTA can provide finance more effectively to SME businesses.
AgDevCo has invested $5,000,000 in EFTA to provide funding for its next expansion phase. AgDevCo’s investment is split between equity, to strengthen EFTA’s balance sheet and provide core capital, and debt, which is required to provide EFTA’s financial leases. AgDevCo will also look to support EFTA’s future growth, which will involve raising further debt finance for the business.