Tanzania’s miners are expected to benefit from increased bank loans, following the introduction of alternative collateral financing scheme, aimed at easing access to capital, specifically small-scale.

This comes after the minister for Minerals Anthony Mavunde (pictured) unveiled the historic launch of new scheme yesterday in Dar es Salaam, soon after the signing of Memorandum of Understanding (MoU) for implementing the services, between the Mining Commission and CRDB Bank  .

Speaking during the launching of the new services, Minister Mavunde noted that the mining sector continues to grow rapidly, contributing 10 percent to the national Gross Domestic Product and more than 56 percent of foreign exchange earnings, through annual mineral exports exceeding US$5 billion.

“The mining sector is now an engine of our economy. What we are witnessing today is a bridge connecting the Government’s vision with financial capital from the banking sector. This partnership directly touches small-scale miners and elevates them into the formal economy,” said Minister Mavunde.

He emphasized that under the leadership of President Samia Suluhu Hassan, the government has been implementing policy, regulatory, and administrative reforms to ensure that the mining sector benefits more Tanzanians, particularly small-scale miners. 

He stressed that the government’s objective is to move beyond exporting raw minerals and instead promote local processing and value addition within the country.

The framework launched by CRDB Bank introduces major reforms in collateral requirements by recognizing alternative collateral directly linked to mining activities. 

For the first time in Tanzania’s banking sector, valid mining licenses, gold sale contracts, and stored gold held in refining facilities are recognized as acceptable security for loans.

CRDB Bank’s Group CEO, Abdulmajid Nsekela, described the initiative as a comprehensive financial system that addresses the entire mining value chain—from extraction and processing to storage, transportation, trade, and both domestic and international markets.

“This is a new financial structure that acknowledges the realities of the mining sector. We have accepted collateral derived from miners’ actual operations instead of unrelated assets. This will open doors for thousands of small-scale miners who were previously excluded from the formal financial system,” he said.

He explained that the framework includes working capital loans to support mining operations, financing for the purchase of modern equipment and machinery, gold-backed loans, insurance services for mines and workers through the bank’s insurance subsidiary, and dedicated mineral and gold transaction accounts designed to enhance traceability and transparency in trade.

On his part, the bank’s Vice Chairperson of the Board of Directors, Donald Mmari, informed the minister that the board has put in place strategic guidelines aimed at ensuring the mining sector grows in line with principles of sustainability, accountability, and inclusive economic development.

“We want to see small-scale miners graduate from traditional mining methods to using improved technologies, accessing formal markets, and participating in value addition. Growth in the mining sector must be sustainable and beneficial to communities,” said Dr. Mmari.

By the end of last year, the Bank had extended loans totaling TZS 186 billion to the sector, of which 136bn/-  went to large-scale miners and  50bn/-  to small-scale miners.

Speaking on behalf of miners, John Bina the President of the Federation of Miners’ Associations of Tanzania (FEMATA) said the initiative has brought renewed hope to small-scale miners who had long struggled to secure financing due to lack of acceptable collateral.

“Today marks the beginning of a new era. Small-scale miners have been recognized as legitimate development partners. We sincerely thank for this  solution, and we pledge to continue working closely with both the bank and the government to ensure we use this opportunity responsibly,” he said.