Tanzania introduces financial model for dairy farmers

TANZANIA – The government has backed a new financing model that will enable smallholder livestock keepers to acquire dairy cattle and repay loans through milk sales, as part of efforts to raise productivity and household incomes in the livestock sector.

The initiative, known as iMbeju Kilimo – Kopa Ng’ombe, Lipa Maziwa, supported by CRDB Bank Foundation, seeks to address some of the challenges facing small-scale livestock keepers by linking them to productive assets, financial services, technical knowledge, technology, insurance and markets.

Under the scheme, farmers receive dairy cattle and repay the financing through income generated from milk production, creating a model intended to allow livestock keepers to expand their enterprises without facing the burden of conventional loan repayments.

Speaking during the launch, Dr Bashiru, Minister for Livestock and Fisheries, said the initiative represented an important form of inclusive economic empowerment because it allows farmers to turn livestock into productive assets and milk into a source of regular income.

He said the ultimate measure of the programme’s success should not simply be the number of cattle distributed, but whether farmers increase milk production and improve their incomes.

Dr Bashiru also cautioned stakeholders involved in the programme, particularly financial institutions, over the management of livestock insurance, saying effective risk protection was essential if farmers were to safeguard their investments and meet the programme’s objectives.

His remarks highlight a key challenge in expanding livestock financing, where disease, death of animals and other risks can undermine farmers’ ability to generate income and repay loans.

CRDB Bank Foundation Executive Director Esther Tully Mwambapa said the programme was designed to help smallholder livestock keepers move from low-productivity farming into commercially viable businesses.

She said the foundation was combining financing with knowledge, technology, risk management and market access, arguing that sustainable empowerment required more than simply providing farmers with money.

The beneficiaries will repay the loans through milk produced from the cattle, effectively linking financing, production and repayment in a single value chain.

The programme comes as Tanzania’s dairy industry continues to expand. National milk production increased from about 3.9 billion litres in 2023/24 to 4.2 billion litres in 2025/26, reaching about 97 per cent of the annual target of 4.3 billion litres.

The growth underscores the potential of the dairy industry to contribute to rural incomes, employment and food security, while also creating opportunities for investment across the milk value chain.

For the new financing model to deliver lasting results, however, farmers will need reliable extension services, quality dairy breeds, affordable animal health services, effective insurance and dependable markets for their milk.

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