ICT startups get financing boost
DODOMA: THE government has launched a 5bn/- financing programme for youth-owned ICT startups, targeting the growth of innovative businesses, creation of jobs and expansion of opportunities in the digital economy.
The financing, provided through the National Economic Empowerment Fund, will enable young entrepreneurs to develop and commercialise their innovations, expand their businesses, reach new markets and create employment opportunities.
Speaking on Friday at the launch of the ICT Startups Loan Empowerment Programme in Dodoma, Minister for Communication and Information Technology, Ms Angellah Kairuki, said the initiative was part of efforts to implement President Samia Suluhu Hassan’s directive to support emerging innovation and technology companies.
Ms Kairuki said the loans would be provided in three categories: 1m/- to 25m/-, above 25m/- to 50m/- and above 50m/- to 100m/-, subject to established criteria and conditions, adding that the programme would support companies developing digital solutions in sectors including finance, law, entertainment, agriculture, tourism, insurance, education, transport and logistics, digital services and e-commerce.
“We want to see startups using these funds to grow, create jobs, increase their customers, enter new markets and build sustainable businesses,” she said.
She said the programme was intended to ensure that available capital stimulated innovation, production of goods and services, company growth, job creation and market expansion.
“The funds are a catalyst for growing startups and increasing the contribution of the ICT sector to Tanzania’s economy,” she said.
At the launch, the government, through the ministry, witnessed the handover of funds to Azania Bank for implementation of the programme, alongside the signing of a cooperation agreement between the ministry and the bank.
Ms Kairuki issued six directives to improve implementation of the programme, including speeding up the assessment and disbursement of loans and ensuring eligible innovators and startups register through Jamii Hunt for identification and submission of applications.
She also directed the ICT Commission to complete guidelines to enable startups to participate in government tenders, a move aimed at expanding market opportunities for emerging technology companies.
Ms Kairuki said the ministry would establish a monitoring and evaluation system to measure the performance of beneficiary companies, including growth, jobs created, sales and revenue, markets reached, new products and services developed and loan repayment.
ALSO READ:Kairuki pushes stronger Africa-Korea tech cooperation for Growth
“The beneficiaries must use the loans for their intended purposes, grow their businesses and seek markets both within and outside the country,” she said.
The government is also preparing a National Startup Policy under the supervision of the Prime Minister’s Office to establish a broader framework for supporting startups beyond access to finance.
Ms Kairuki said the ministry would oversee implementation while ensuring efficiency, transparency and accountability and reducing unnecessary bureaucracy.
The programme will be implemented in collaboration with Azania Bank, with beneficiaries required to maintain financial discipline, sound corporate governance, product quality, system security and customer data protection.
ICT Commission Board Chairman, Mr Henry Mwanyika, said startups had been facing difficulties accessing working capital, urging beneficiaries to repay the loans to enable other young entrepreneurs to benefit.
Tanzania Startup Association Executive Director, Mr Zahoro Muhaji, described the allocation as an important step towards strengthening the startup ecosystem.
National Business Council Executive Secretary, Dr Godwill Wanga, urged innovators to develop digital solutions across all 21 economic sectors to expand the benefits of the digital economy.
Azania Bank Managing Director Dr Esther Mang’enya said the bank, in collaboration with the ministry, would oversee the assessment and disbursement of loans to companies that meet the set criteria.
She said the partnership would also include capacity-building for young entrepreneurs in financial management, record keeping and business planning to help them build sustainable companies capable of creating jobs.
