Until 1990/91 there had been much dependence on donations and grants from external donors as far as acquisition of inputs was concerned. Also banks such as CRDB played a major role in sustaining agricultural production by providing credit through Cooperatives.

These banks received money through special agricultural production and crop purchase funds from the Bank of Tanzania for lending to unions for procurement of inputs.
 

However, this financing arrangement face dome problems but more important was poor loan repayment by Cooperatives. The CRDB for example between 1985/86 and 1989/90 recorded an average recovery of 29%.

Despite the fact that the Cooperative Unions were not repaying the loans, the banks had to repay back the loans to BOT regardless of whether the loan was recovered or not. This was a loss to the banks and the banks had to reduce the loans to the unions, which reduced the supply of inputs to the farmers. Furthermore, in 1991 the banking and
financing institutions Acts called for prudential lending involving hard securities and credit worthiness of the borrowers.  This condition could not be met by most of Cooperative Unions, hence shortages of inputs were continuously worsening and worse still the private sector could not fill the gap as most of the private importers and distributors of inputs were facing liquidity problem.

This widening inputs supply gap called for the Government intervention. The Government had to look for an alternative way of financing in order to ensure sustainable supplies of inputs to the farmers and therefore AGITF was established in 1994. Since then AGITF has undergone transformation and streamline its activities of providing soft loans to sockists, farmers and other beneficiaries in its efforts to enhance recovery of issued loans so that the Fund revolves and sustain itself. In the end more beneficiaries will be able to access the facility.

One of the major national strategic moves towards poverty reduction was to privatise the productive sector for the intension of improving production efficiency.  However, together with the good intension of improving the efficiency of the productive sector, privatizations had shown some negative effects especially on supplies of inputs as most of the necessary production inputs and other supplies are increasingly becoming inadequately available. The fact that the farmers are not credit worthy, challenges the privatization move as under any commercial setting, profitability/viability of farming/enterprises will always dictate the welfare of any money lending business. Therefore the AGITF management had to take this as an important caution to its prosperity.