MSME players call for enhanced finance access, innovation

Dar es Salaam. Participants in the Micro, Small, and Medium Enterprises (MSMEs) Forum 2024 have suggested that access to finance, innovation, building an inclusive economy, and growing under the guiding philosophy be given appropriate attention for entrepreneurship to thrive.

The participants, including entrepreneurs, representatives of the private sector, and the government, spoke during the event’s second edition organised by Mwananchi Communications Limited (MCL).

Speaking during the event, the CRDB Bank Foundation grants manager, Mr Baraka Kiyalo, said the bank offers various loan opportunities targeting different categories.

He said Tanzanian entrepreneurs are divided into various segments, saying the bank’s role was to ensure even the smallest business owners had access to loans through the CRDB Foundation.

“The Imbeju programme provides loans to businesses that may not qualify for traditional loans, such as those lacking collateral. Through the CRDB Foundation, Imbeju offers capital to entrepreneurs without interest or collateral requirements,” he said.

He said the programme provides training to become proficient in financial inclusion, sales, and improving income, noting that thereafter entrepreneurs are eligible for starting capital, beginning with Sh200,000.

“Our main requirement is honesty. A significant portion, over 35 percent, of beneficiaries are from smaller businesses, especially the women and the youth," said Mr Kiyalo.

The Tanzania Commercial Bank (TCB) chief executive officer, Mr Adam Mihayo, said an inclusive economy was key for small businesses to thrive.

“This year, TCB has announced a five-year strategic plan with the allocation of Sh300 billion to support MSMEs. Already, Sh151 billion has been disbursed to 2,481 MSMEs,” he said.

He said there is a great demand for those needing financial services, noting that on the supply side, a majority of banks have little interest in supporting MSMEs.

“Seventy percent of our target is for people in formal employment. However, TCB decided to lead by example, and focused on MSMEs, which is a cross-cutting sector touching agriculture and mining, among others,” he said.

However, he said credit is a huge risk because of the lack of financial literacy, saying TCB has an interest in funding MSMEs.

According to him, Sh150 billion has been disbursed, noting that 30 percent of which has been disbursed to women who are trustworthy in repaying debts.

“Since a large part of the country is unsurveyed making the loans insecure, we entered into a partnership with insurance companies and the Tanzania Agriculture Development Bank (TADB) to provide loan guarantees with whom we share the loss risks,” he said.

Funguo Innovation Programme manager at the United Nations Development Programme (UNDP) Tanzania, Mr Joseph Manirakiza, said innovation is considered a key factor for businesses to be valuable.

He said they aim to facilitate access to finance for creative enterprises, partnering with innovation hubs to improve entrepreneurial services, and collaborating with the government.

According to him, businesses seeking finance are mandated to compete and showcase innovations they intend to bring, noting that usually, innovative businesses experience rapid growth.

“Businesses that grow quickly, with unique business models, must have some unique features, such as using certain technologies that accelerate growth. Therefore, we try to connect and collaborate with other financial service providers," he said.

Mzumbe University’s innovation and entrepreneurship manager, Prof Emmanuel Chao, said the main challenge facing small businesses was growing without a guiding philosophy.

"Any institution can only thrive if it is grounded in principles that foster its growth. It's not just about providing capital and access to markets; motivations are crucial, and having a clear business philosophy is essential,” he said.

“No successful institution operates without a guiding philosophy. The lack of philosophy is often why many businesses remain stagnant," remarked Prof Chao, who doubles as an industrial linkage, and director of the Marketing Science Association of Tanzania.

He explained that selling in the market involves trust and perspective, noting that without understanding what one is selling, success may be fleeting.

Tigo's head of sales, Mr Gabriel Ndabho, said his company has an MSME department and that through the digital economy, “We have created an enabling environment to stimulate the economy, especially for MSMEs.”

Mwananchi Communications Limited (MCL) executive editor Victor Mushi urged entrepreneurs to take proactive steps to further their development.