Kikwete pledges speedy reversal of abject poverty

from IPP Media

By Lusekelo Philemon

President Jakaya Kikwete has pledged to speedily reverse the trend of the country abject poverty facing about 85 per cent of the estimated 35 million Tanzanians.

Speaking to an international economist, who is the founder of Gramees Bank and also a Nobel Peace prize laurette-2006, Professor Mohamed Yunus from Bangladesh at the State House on Tuesday, the President said the government had put in place practical and focused strategies aimed at pulling millions of Tanzanians out of vicious circles of poverty.

`The governemnt has developed strategies to accelerate progressive operations of small and medium-scale enterprenneurs (SMEs) in order to increase their income and create jobs,` he said.

The respective strategies focus on extending soft loans to the entrepreneurs so as to help them invest in businesses that create jobs, he said.

The government has dished out 21bn/- to support progressive development of small and medium-scale entrepreneurs throughout the country.

The President advised the beneficiaries of the funds to be aggressive, creative, and innovative in designing viable businesses worth funding as a strategy to get out of poverty.

`I am still committed to improving the living standards of Tanzanians through provision of loans and institution of other mechanisms. I will honour my pledge of bringing about quality lives for all Tanzanians,` said Kikwete.

The President had invited Prof. Yunus to share his both experience and expertise with local banks and credit unions on appropriate methodologies of improving living standards of the people and alleviating poverty.

`I am happy you have accepted my invitation. I expect to learn more on the tricks Bangladesh employed to get out of poverty,` Kikwete said.

He observed that the operations of commercial banks were unfriendly to poor people because of high interest rates charged on loans.

`There is a need to develop alternative arrangements outside the commercial banking systems to assist ordinary people access loans and other credit facilities,` he said.

He, however, hailed the few banks that had started providing loans to ordinary people, who, for years, had not been considered credit worth.

Professor Mohamed told the President that Tanzania had both potentials and opportunities natural resources and good governance to eradicate poverty.

`My country has millions of poor men and women compared to Tanzania. Resources and potentials are there; what is needed is creativity,` he said.

He said Bangladesh had managed to transform street beggars into entrepreneurs, and challenged the government to provide such opportunity to the countrys needy.

Prof. Mohamed advised the government to facilitate provision of interest-free bank loans to the poor or those charged at 10 percent as a strategy to stimulate growth of SMEs sector and the countrys economy.

`Any bank loan with interest rate above 10 percent cannot help poor men and women out of poverty,` he said.

Prof. Mohamed refuted misconceptions that poor people could not pay back bank loans, citing the example of Grameen Bank, of which he is a founder, that gives loans to poor people, and most of them repay without any problem.

He challenged the countrys banks to provide extensive training on the best business practices to prospective SMEs.

`If you equip them with requisite business skills, they will be able to repay the loans,` Prof. Mohamed said.

He appealed to Tanzanians to wake up and access bank loans, saying this was the best way to succeed in business.

Prof. Mohamed also held talks with the Minister of Finance, the Governor of the Bank of Tanzania, representatives of financial institutions and Non-Governmental organizations dealing with issuance of credit.