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9.3.1 The CRDB Bank: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005

9.3.1 The CRDB Bank: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005

The CRDB Bank, 90 per cent owned by DANIDA (the government still holds 10
per cent of the shares) provides both wholesale and retail lending services. Reportedly, it
has a 40 per cent share of the micro-finance market, with centralized lending provided
through their 24 branches.

For the first three quarters of 2003, CRDB statistics on micro-finance activities
indicate that women made up about 41 per cent of their members, and received 47 per
cent of their loans (loans to female clients, see Table 7).34 During the period, male
members received an average of 2.12 loans and women members received an average of
2.54 loans. There is no indication of the distribution between women and men of the
Tshs 25.6 billion in total loan disbursements.

Since 2002, the Bank has been piloting the SACCO concept (Savings and Credit
Cooperative Society) in four regions of the country as a way of group-lending to MSEs.
Under this system, the CRDB Bank lends to wholesalers, who in turn deliver microfinance
products through the SACCOs. To participate as a SACCO, groups of MSEs
must form and register themselves. Each individual member must agree to buy shares in
the SACCO, which makes them eligible to borrow at a 1:3 ratio depending on the
number of shares they have. Members must also contribute 25 per cent of the loan
amount as security-on-deposit with the CRDB. The wholesaler borrows from the CRDB
at 12.5 per cent and lends out to SACCOs at 24 per cent (2 per cent per month). It
appears that only one of the SACCOs is for women only.

A survey of 125 SACCOs undertaken by the CRDB Bank recently found only 25
operating on a “best practice” basis, the top performing of which was the women’s
SACCO. One of the other findings was that for mixed group SACCOs, women
borrowers had lower default rates than men, a finding consistent with other studies of
micro-finance lenders. The Bank delivers three levels of training to SACCOs – to all of
their members, to their professional staff, and to their management committees. The
intent of the Bank is to roll the SACCO model out across the country. The CRDB aims to
become a retail bank within the next five years. Within this context, funding SACCOs is
an approach for the Bank to reach MSEs that have the potential to become individual
loan clients.

On the individual lending side, the Bank prefers to provide loans of over TShs 2
million. Their normal collateral security requirement is 154 per cent of the loan amount.35
For loans over TShs 20 million, the client has to have a professional business plan. The
Bank key informant stated that the number of women clients in this larger loan category
is very low, adding that most MSE sector women are not encouraged to go to banks
because they do not have a track record and are unable to meet collateral requirements. A
serious encumbrance is women’s lack of property ownership, and the reluctance of many
husbands to give consent to their wives to pledge matrimonial property against an
enterprise loan.





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International Labour Organization
(Visit International's Website) As the world's only tripartite multilateral agency, the ILO is dedicated to bringing decent work and livelihoods, job-related security and better living standards to the people of both poor and rich countries. It helps to attain those goals by promoting rights at work, encouraging opportunities for decent employment, enhancing social protection and strengthening dialogue on work-related issues. The ILO is the international meeting place for the world of work. We are the experts on work and employment and particularly on the critical role that these issues play in bringing about economic development and progress. At the heart of our mission is helping countries build the institutions that are the bulwarks of democracy and to help them become accountable to the people. The ILO formulates international labour standards in the form of Conventions and Recommendations setting minimum standards of basic labour rights: freedom of association, the right to organize, collective bargaining, abolition of forced labour, equality of opportunity and treatment and other standards addressing conditions across the entire spectrum of work-related issues.

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More International Labour Organization
222 The concept of training Contributory factors
631 Indigenous skills and knowledge Forprofit and NGO training activities
111 Working to end child labour Working Out of Poverty
52 Structure for implementing the SME Development Policy Support for Growthoriented Women Entrepreneurs in Tanzania 2005
117 Building partnerships Working Out of Poverty
14 Our experience Working Out of Poverty
733 Reconceptualising the role of training Mainstreaming skills development for the poor
160 Closing comments Support for Growthoriented Women Entrepreneurs in Tanzania 2005
21 The rise and fall and rise of private sector Support for Growthoriented Women Entrepreneurs in Tanzania 2005
Preface Working Out of Poverty
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