Who is FSDT and what do they do to you?


When you think of financial assistance in Tanzania, the first idea that comes to your mind is FSDT. This acronym means Financial Sector Deepening Trust. Tanzania, like most emerging nations, is in dire need of monetary aid. In Third World Countries, financial industry is way above the reach of underserved potential group who have their ready products for the market. Although most governments of developing countries have exerted their efforts, the growth of the financial sector is at snail-pace.

Financial Sector Deepening Trust Fund (FSDT)

FSDT is more than just a financial service that addresses systemic restrictions in the market to achieve pro-poor growth in the financial sector. It works to give more and offer better financial services to satisfy the needs of impoverished households in the rural and urban areas. Among the mentioned constrains in Tanzania are

  • Wide gap between the legal, its principles and regulatory structure;
  • Information imbalance between clients and Financial Service Providers (FSP);
  • FSPs and customers’ low capabilities;
  • Inferior market infrastructure;
  • Failure to meet demand for financial services; and
  • Appropriate financial products.

Without the assistance of FSDT, the course of finance seldom reaches the under-served sector or if it does, it will always be inadequate. FSDT works to enhance the potentials of service providers in their roles as accounting, auditing, educational and legal entities.

What FSDT does for you?

 As investment fund, FSDT’s goals are for more people especially the rural sector to:

  • Acquire better access to Tanzania’s financial sector;
  • Identify better opportunities for funding and investment;
  • Find funding investment opportunities and other similar projects;
  • Develop market systems for underserved individuals to enjoy maximum advantages; and
  • Equip them with competencies and options to upgrade their lives.

For funding, FSDT uses a wide range of instruments. Loans are available for institutions that are firmly established. For clients that are weaker and others in the same circumstances, grants are made available. For those who find difficulty in fitting in these two instruments, there is the debt-equity hybrid or convertible debt or a combination of these can be arranged.

Consortium and FSDT

A consortium of five principal development partners boosts up Tanzania’s financial sector:

  • CIDA – Canadian International Development Agency
  • DANIDA – Danish International Development Agency
  • DFID Department for International Development
  • SIDA – Swedish International Development Agency, and
  • Royal Netherlands Embassy.

Launched in October of 2005, the consortium properly channeled resources to ameliorate the poor financial markets of the country. The consortium is the proper response to the needs of National Strategy for Growth and Poverty Reduction and the government’s National Microfinance Policy. Using them will serve better efficiency from any counterpart in search of support.


The partners of FSDT involved a wide range of multi-sectors. They are: (1) Bank of Tanzania; (2) Capital Markets & Securities Authority; (3) Ministry of Agriculture; (4) Ministry of Finance; (5) Registrar of Cooperatives: and (6) Tanzania Insurance Regulatory Authority. The policy they agreed upon was to establish a viable environment that is geared toward the development financial sectors that are capable of meeting and satisfying the needs of all individuals as well as enterprises.

The commitment of FSDT is to espouse the correct development market approach in order to eliminate systemic constraints and make positive contribution to the growth of the financial sector.