1. PASS – Private Agricultural Sector Support Trust Credit Guarantee and Business Development Services for Small and Medium Agro-Enterprises Private Agricultural Sector Support (PASS) Trust By Andrew E. Temu Danida Development Day – 2009 Copenhagen

2. PASS – Private Agricultural Sector Support Trust Purpose and Objectives of PASS Increase the involvement of small and medium scale private sector entities in commercial agriculture. Providing technical services and financial linkages to small and medium scale commercial agricultural entities – Address the challenge posed by lack of collateral – Encourage FIs to operate beyond their risk comfort zone Encourage formation of producer organisations for market linkages – agribusiness development – access to finance Use of the Vertically Integrated Commodity Systems Approach – Resolve challenges experienced by players along value chains

3. PASS – Private Agricultural Sector Support Trust PASS’s Products and Services: 1.Business Development Services i.Investment Appraisals ii.Business Plans iii.Agribusiness Feasibility and Market Studies 2.Financial Services: Links with banks 3.Credit Guarantee 4.Development of farmer organizations 5.Facilitating contract farming 6.A combination of the above

4. PASS – Private Agricultural Sector Support Trust PASS and Agricultural Value Chains

5. PASS – Private Agricultural Sector Support Trust PASS and Agric. Value Chains Sugarcane sector: A Single Entry Point Intervention - Direct to Beneficiaries

6. PASS – Private Agricultural Sector Support Trust Livestock: A Multiple Entry Points Intervention

7. PASS – Private Agricultural Sector Support Trust Fruit Juice Concentrate: Single Entry Point away from Intended Beneficiaries IMPACT Over 10,000 Small Farmers: Pineapples Oranges 20% Export value chain – EPZ status A domestic value chain – 20% as per EPZ conditions

8. PASS – Private Agricultural Sector Support Trust Types of Investments Financed under PASS Guarantee – by end of 2008

9. PASS – Private Agricultural Sector Support Trust PASS- Growth in Business 2002-09 Bad Debts are less than 2%

10. PASS – Private Agricultural Sector Support Trust PASS : The Evolution and a Drive towards Autonomy and Sustainability

11. PASS – Private Agricultural Sector Support Trust 1 Partner Bank3 Partner Banks>5 Partnering Banks PASS’s Institutional Evolution

12. PASS – Private Agricultural Sector Support Trust The PASS Model & Sustainability CRDB EXIM Bank ACB FBME NMB

13. PASS – Private Agricultural Sector Support Trust Year20032004200520062007200820091stQ TSh Million Revenue79.016.0198.590.5740.7715.8297 Expenditure265244.4366.5345.1461.1490.4204 Net Income-186 -228-168-25528022593 1 US$ = 1,300TSh Financial Operational Sustainability of PASS

14. PASS – Private Agricultural Sector Support Trust PASS Results and Impacts

15. PASS – Private Agricultural Sector Support Trust PASS’s Results and Impacts Improved access to advisory, financial and marketing services. Increased volume of production. Improved quality of the produce. Farmers broadened and enhanced access to markets. Strengthened bargaining power of farmers through formation of groups. Increased employment along nodes of value chains, also in agro-processing Increased income and demonstrable improved living standards.

16. PASS – Private Agricultural Sector Support Trust CropBefore 2003 After 2007 SUGARCANE10MT/ha40-60MT/ha Results and Impacts

17. PASS – Private Agricultural Sector Support Trust CropBefore: 2003After: 2007 Coffee2kg/tree6 kg/tree Results and Impacts

18. PASS – Private Agricultural Sector Support Trust CropBefore: 2003After: 2007 Laying Percentage Poultry50%75% Results and Impacts

19. PASS – Private Agricultural Sector Support Trust CropTZ’s AveragesPASS: Beneficiaries DAIRY3-5lt.day8-9lt/day Results and Impacts

20. PASS – Private Agricultural Sector Support Trust PASS Lessons and Replication Potentials

21. PASS – Private Agricultural Sector Support Trust Lessons and PASS Replicability in SSA KEY SUCCESS ELEMENTS – CGF Seed Money: Significant but returns are large – All service in one roof: BDS and Credit Guarantee – Human resource development: Role of TA – Supportive Policy Environment – Banks with Surplus Liquidity – Numerous and competing commercial banks – An Underdeveloped Agricultural Sector with Inert Agro-Value Chains

22. PASS – Private Agricultural Sector Support Trust Lessons and Replicability THE ‘DON’T Dos’ AND OTHER RISKS – Political interference and micro-management – Macro-economic instability Inflation, unstable exchange rate regime, etc. Loans become expensive when having to cover such risks Monetary policy e.g. use of Treasury Bills to control money supply – Well Regulated and Managed Financial System and Banks Bank runs would results in substitution rather than additionally

23. PASS – Private Agricultural Sector Support Trust Thank you for listening