What Is FSDT: A Few Things You Should Know
What Is FSDT: A Few Things You Should Know
In Tanzania, poverty remains to be one of the most pressing problems, similar to the situation of other countries around the region. There are many reasons on why such is the case, including regulatory frameworks. More so, it can also be attributed to the lack of financial inclusion and literacy amongst the citizens of the country.
In Tanzania, poverty remains to be one of the most pressing problems, similar to the situation of other countries around the region. There are many reasons on why such is the case, including regulatory frameworks. More so, it can also be attributed to the lack of financial inclusion and literacy amongst the citizens of the country.
A Few Things You Should Know
With this, the Financial Sector Deepening Trust (FSDT) has been established. It is a collaborative effort between five major government donors, which include UK Department of International Development, Canadian International Agency, Swedish International Development Agency, Danish International Development Agency, and Royal Netherlands Embassy.
Bringing Greater Financial Accessibility
FSDT is committed towards providing easy access to the resources that are needed by financial institutions in Tanzania. In a nutshell, it can be seen as an investment fund. It seeks to identify various opportunities in the local market and in turn, providing the money that is necessary in order to transform such into reality. They are helping small banks and micro financing institutions. This is going to help build sustainability and to make sure that the financial sector is going to grow significantly in the future and will not be left behind.
Beyond Financial Assistance
While FSDT provides funding to the financial sector, they also go beyond monetary assistance. They are also proactive in improving the capacity of service providers. Recognising the fact that there is still a huge information and knowledge gap in many industries in Tanzania. FSDT is committed towards closing such and providing people with the skills that they need. The organisation is also active in supporting regulatory, legal, and policy frameworks, taking inspiration from the most successful markets in the world and teaching Tanzanians how they could adopt the same. It is not a process that can be accomplished overnight, but FSDT is making sure that they are taking one step at a time.
Emphasis on Theme Areas
FSDT concentrates on four key areas: Agriculture and Rural Finance, SME Finance, Digital Finance, and Insurance. It is recognised that small and medium scale enterprises contribute to about 27% of the country’s GDP. It also employs an average of 5.2 million people. Nonetheless, they have limited access to financial instruments, which is basically the reason why FSDT is focused in providing them with the finances that they need. The same thing is true in the case of businesses in the field of agriculture. With the help of FSDT, these four key sectors can realize vast opportunities to improve and succeed.
Funding Instruments for All
With the goal of being able to establish financial inclusion, the FSDT has a variety of funding instruments that are available for anyone who is in need. Grants, for instance, are provided for weaker clients or for those who do not have any financial capacity to apply for a loan. On the other hand, for more established institutions, there are loans that are available. The amount that can be applied for is usually higher, and the repayment terms are reasonable.