Tobacco growing areas remain underserved by commercial banks in the country despite their high potential as a result of high incomes of farmers.The crop accounted for 33 per cent of the value of all cash crops exports in the year ending April, according to the Bank of Tanzania, generating $225.7 million (Sh361 billion).
The Tanzania Tobacco Leaf Company’s Director for Legal and Corporate Affairs Richard Andrew Sinamtwa said here that lack of banking services has significantly eroded the savings culture of farmers condemning them to perpetual poverty.
A perfect example is Lupa in Chunya district, he said, a place where tobacco farmers earn billions of shillings annually but cannot put that money in banks because they are too far.
“We need to promote a savings culture that goes hand in hand with promotion of rural banking ”, he said when donating building materials for construction of a dormitory for Kipalala secondary at Lupa.
The Tanzania Tobacco Leaf company donated 300 bags of cement and 300 pieces of corrugated iron sheets worth Sh15 million for the construction.The nearest banking services for Lupa residents in 100 kilomtres away in Chunya, a journey that could take days because of poor road condition.
Chunya District Administrative Secretary Sosthenes Magoha, on his part, said plans were under way to launch a community bank for Chunya residents, and a steering committee to oversee the project had been formed.
“We have discovered that you have a problem of lack of banks to deposit your money, and that is why most of the farmers lives don’t change compared to farmers in coffee producing areas despite getting a lot of money,” he said.
Mr Magoha said some Sh 850 million will be raised as the mandatory capital requirement. Sh2 billion will be needed during the transition period as recommended by experts.
The dormitory, whose construction is sponsored by TLTC, would accommodate 48 students. Residents have contributed 40 and 35 truckloads of sand and stones respectively at the construction site.