Absa Bank Tanzania has introduced a new financing solution aimed at expanding access to business funding by removing collateral requirements and using merchants’ transaction performance as the basis for lending decisions.
The initiative, known as Absa Merchant Financing, is designed to support businesses engaged in active trade across goods and services, including wholesalers, sub-wholesalers, dealers, and retailers who use point-of-sale (POS) machines and other digital payment channels.
The product is expected to ease one of the long-standing challenges facing small and medium enterprises in Tanzania, where lack of collateral has often limited access to credit despite steady cash flows.
Through the new model, the bank will assess eligibility and lending limits using historical POS transaction data rather than traditional asset-based security.
This approach allows merchants with consistent sales performance to unlock short-term funding that reflects their actual business activity and growth potential.
According to the bank, the solution is structured as an unsecured short-term facility that is quickly accessible once a merchant’s performance has been evaluated.
The financing is intended to help businesses respond to immediate operational needs, stock replenishment, and emerging market opportunities without the delays often associated with conventional lending processes.
Absa Bank Tanzania says the product also simplifies access to credit by streamlining the assessment process, where transaction history is used to establish borrowing capacity and repayment ability.
This shift, the bank notes, is part of a broader effort to strengthen digital financial inclusion and support the growth of cashless transactions in the country.
Speaking on the launch, the Head of Products and Channels in Business Banking, Jane Kalumuna, said the new financing model is designed to recognise real business performance rather than focusing on physical assets.
She said many businesses with strong and consistent cash flow have previously been excluded from financing due to lack of collateral, a gap the bank now aims to close.
She added that the solution is intended to turn everyday sales activity into an opportunity for growth, enabling merchants to access funding based on how their businesses operate in real time rather than historical asset ownership.
The bank’s Brand, Marketing and Communications Manager, Beda Biswalo, said the initiative reflects Absa’s commitment to supporting customers through practical and inclusive financial solutions. He noted that the approach aligns with the bank’s purpose of empowering customers by turning their business stories and performance into tangible opportunities for expansion and sustainability.
Absa Bank Tanzania said the merchant financing product is also expected to strengthen long-term customer relationships, improve financial flexibility for small and medium enterprises, and enhance access to tailored banking services that respond to real trading patterns.
By leveraging digital transaction data, the bank aims to broaden financial access for businesses that are already active in the formal and semi-formal economy but remain constrained by traditional lending requirements.
The initiative is expected to contribute to increased business resilience, improved cash flow management, and wider adoption of digital payment systems across the retail and wholesale sectors in Tanzania.
