Tanzanian startups demand law reform, urge end to lending gaps

By Ramadhani Ismail and Joanne Mwita

Dar es Salaam. Tanzania’s ambition to build a competitive innovation economy came into sharp focus yesterday, December 2, as experts at the Tanzania Start-up Week 2025 warned that persistent financial barriers from gendered lending gaps to outdated investment regulations are slowing down the country’s progress.

The sessions brought together regulators, financiers, founders, and investors who each pointed to weaknesses within the financial and policy ecosystem that, if addressed, could significantly shift the country’s growth trajectory.

According to the Financial Inclusion Manager at the Bank of Tanzania (BoT), Nangi Massawe, said that although women are increasingly entering high-growth sectors, they still face notable limitations in securing credit, venture capital, and equity financing.

“Across Tanzania today, women continue to lead micro and small businesses in trade, agriculture, hospitality, manufacturing, creative industries, and digital commerce,” she said.

She added that progress remains uneven because many women lack collateral such as land and assets, while others do not have digital financial identities or formal transaction histories, factors that immediately disqualify them from obtaining loans.

“These obstacles are not a reflection of women's potential,” she said. “They reveal structural challenges within our financial ecosystem that require coordinated interventions.”

She outlined BoT’s interventions, including promoting women’s leadership in financial institutions, enforcing sex-disaggregated data collection, strengthening consumer protection for women and expanding digital payment systems such as TIPS.

She said regulatory sandboxes are enabling fintech solutions designed specifically for women and underserved groups.

Representatives from financial institutions echoed the need for stronger support systems.

TADB’s Precious Oganda said credit-guarantee schemes must be strengthened to make women more bankable.

“We work with commercial banks to ensure guarantees are in place, so collateral challenges can be addressed,” she said. “This is how we enable women to access credit and strengthen their financial capacity.”

At the same session, PASS Trust’s Oscar Kimaro underlined the importance of financial literacy, saying women often struggle when they receive capital without adequate training.

“That is why we provide financial education so women understand the value chain and the foundation of the businesses they want to build, even for digital agriculture enterprises,” he said. He added that PASS also encourages women to lend to one another, expanding their financial networks. “We achieve greater results when we invest in women.”

While gaps in women’s financing highlighted issues of equity, a different panel on Venture Capital and Private Equity Syndications underscored the broader investment challenges facing the country.

Venture Associate at African Renaissance Venture, Lexi Lei, said Tanzania is losing out on substantial venture capital because investors face legal uncertainty.

“There are a few VCs sitting outside Tanzania investing here, but most of our funds are deployed elsewhere,” she said. “Without specialised legal structures for venture-capital and private-equity funds, we are forced to rely on workarounds like offshore setups.”

She welcomed ongoing efforts by the Capital Markets and Securities Authority (CMSA) to establish a VC/PE framework, saying global investors prefer familiar fund structures such as limited partnerships.

Africapita CEO Burak Büyüksaraç said unresolved issues, including capital-gains taxes, double taxation and exit challenges continue to discourage local and international investors.

“As long as these taxation issues persist, funds will not come in. Simple as that,” he said, calling for stronger coordination among government agencies.

Founders were also urged to strengthen their business fundamentals before pursuing investment. Beem CEO Taha Jiwaji said start-ups should secure product-market fit first.

“It’s better to achieve product-market fit before you raise external money,” he said. “VCs are concerned about your next raise, and without product-market fit, you may not fit their cycle.”

He also advised start-ups to maintain independence in partnerships. “Stand on your own feet. Large partners may try to lock you in, which can limit growth.”

On the broader investment landscape, Coprosperity Fund Managing Partner, Antony Adolf, said Tanzania must resolve its regulatory issues to attract third-party capital, noting that Rwanda’s model offers lessons.

“There are many VCs. Never give up,” he said. “Be tactful in your approach.”