Unlocking Finance for Tanzania's Food Systems: A New Pathway for Smallholder Cooperatives in SAGCOT

Bridging the Gap Between Farmers and Finance

For thousands of smallholder farmers across Tanzania's Southern Agricultural Growth Corridor (SAGCOT), access to finance remains one of the biggest barriers to expanding production, adopting sustainable agricultural practices, and building resilient livelihoods. While banks, investors, insurance providers, and climate finance facilities exist, many farmer cooperatives remain unable to access the capital they need to grow.

Recognizing this challenge, IUCN through the SUSTAIN Productive Landscapes for Inclusive Growth (SUSTAIN Pro) programme, partnered with the Kilimo Round Table Africa (KRTA) to convene a high-level Investment and Matchmaking  Roundtable to break that pattern by reframing the dialogue from transactional matchmaking to a structured diagnostic and pipeline launch. The event brought together financial institutions, government agencies, agribusinesses, insurers, mechanization providers, farmer organizations, development partners, and cooperatives to address one critical question: How can we unlock investment and finance for Tanzania's smallholder farmers? Rather than serving as another networking event, the roundtable was designed as a practical platform for action creating direct dialogue between those seeking finance and those providing it, while identifying the barriers preventing productive investment across agricultural value chains.

IUCN Tanzania

Moving Beyond Conversations to Concrete Solutions

Financial institutions and farmer cooperatives at times operate within separate ecosystems. Banks often view smallholder farmers as high-risk. Cooperatives struggle to meet lending requirements due to lack governance and aggregation scale; off taker contracts are limited by side-selling, quality risk, and weak enforcement; crop insurance is underdeveloped; asset finance is fragmented; green finance pools are inaccessible to cooperatives without safeguards and Measurement, Reporting, and Verification (MRV) infrastructure; and policy bottlenecks across multiple ministries sit unresolved. Each stakeholder has a credible reason for not transacting with the others, and conventional matchmaking events produce expressions of interest rather than financing flows.

The roundtable provided an opportunity for these stakeholders to openly discuss their challenges and expectations. Financial institutions outlined the conditions required for lending while cooperatives highlighted the obstacles they face in becoming investment ready. 

Government agencies, private sector actors, insurers, and development partners contributed perspectives on policy, risk management, market access, and sustainable value chain development. This honest and structured dialogue helped shift the conversation from identifying problems to designing solutions, creating a shared understanding of what is needed to strengthen agricultural financing ecosystems in Tanzania.

Creating an Investment Pipeline for Smallholder Farmers

One of the most significant outcomes of the event was the development of a SAGCOT Food System Investment Pipeline a practical framework designed to connect promising cooperatives with financing opportunities. The pipeline brings together vetted cooperative investment cases and provides a clear pathway for financial institutions, investors, and development partners to assess opportunities and support enterprises with growth potential. By establishing a common understanding of bankability requirements, the initiative aims to increase the number of cooperatives able to access commercial finance over the coming months. The process also highlighted opportunities to connect cooperatives with emerging green and climate finance mechanisms, creating incentives for sustainable production while supporting environmental stewardship and landscape restoration.

Strengthening Partnerships Across the Food System

The event demonstrated the importance of collaboration in addressing systemic barriers to agricultural food systems development. Through the partnership between IUCN and KRTA, stakeholders who rarely engage directly were able to exchange experiences, identify areas for collaboration, and build relationships that can support long-term investment and growth. Enhanced coordination between cooperatives, banks, agribusinesses, insurers, mechanization service providers, digital agriculture platforms, and government institutions is expected to improve access to financial services, strengthen value chains, and reduce investment risks. Importantly, the roundtable also created space to identify policy and regulatory bottlenecks affecting agricultural finance, enabling government representatives to engage directly with stakeholders and explore solutions that can improve the enabling environment for investment.

Building Resilient Landscapes Through Inclusive Finance

Access to finance is not only an economic issue it is also a sustainability issue. When farmers can invest in improved technologies, climate-smart agricultural practices, value addition and market access, they become better positioned to increase productivity while protecting natural resources. By supporting stronger cooperatives and more inclusive financing systems, the roundtable contributes to broader efforts to create productive landscapes that benefit people, nature, and local economies. Improved access to finance can help farmers adopt sustainable land management practices, enhance resilience to climate change, and strengthen food security for rural communities.

IUCN Tanzania

Supporting Sustainable Transformation Through SUSTAIN Pro

The roundtable forms part of the broader SUSTAIN Productive Landscapes for Inclusive Growth (SUSTAIN Pro) programme, implemented by IUCN in Tanzania. Building on the achievements of the first phase of the SUSTAIN initiative, SUSTAIN Pro promotes sustainable food systems and healthy productive landscapes by scaling sustainable agricultural solutions, restoring land health through multi-stakeholder partnerships, and strengthening inclusive value chains.

In Tanzania, the programme is implemented within the Kilombero and Ihemi clusters of SAGCOTS, working closely with the AGCOT Centre, government institutions, agribusinesses, civil society organizations, and farmer groups. Through these partnerships, SUSTAIN Pro seeks to accelerate the transition towards development pathways that build resilience for communities, economies, and ecosystems.

The Food Systems Finance Roundtable represents another important step in that journey transforming dialogue into action, connecting farmers to opportunities, and creating the conditions for more inclusive and sustainable agricultural investment across Tanzania's productive landscapes.

The investment and matchmaking event discussed in depth various issues concerning development of food systems in Tanzania around agriculture, livestock, and fisheries. The government through the Ministry of Agriculture has outlined strategies to increase crop production through subsidies on seeds and fertilizers. For this year alone, the government anticipate having 1,500 tons of fertilizer, which will be sufficient to meet the demand. Efforts are also underway to improve agricultural policies and cooperatives to enhance farmers' income. For example, in the current MOA budget 2026/2027 the government increased tax charges on importation of crude edible oil by 10% and refined edible oil by 35% or $300 per ton to protect the domestic industries.

In the livestock sector, strategies have been set to improve breeding and strengthen the management of animal welfare. The government has introduced loans for youth and women to support livestock farming and fishing activities.

The event further increased awareness among producer groups and cooperatives regarding access to finance, including information about financial products and services available from financial institutions. The institutions actively showcased and provided guidance in developing bankable investment plans, meeting financing requirements and fostering potential partnerships for the possible financing opportunities.