Mpango roots for startups elevation

VICE-PRESIDENT Dr Philip Mpango has rooted for startups elevation for economic growth.

Dr Mpango insisted on the role of public and private sectors and other stakeholders in ensuring startups expand as they find a footing in the market.

Opening a CRDB Bank annual shareholders seminar here on Friday, the Vice President outlined the country’s failure in advancing its startups unlike its regional neighbours.

“The main reason is stiff regulations that barred them from accessing loans and how to improve their businesses,” he disclosed.

According to the Vice-President, Tanzania ranks number 114 out of 195 countries globally in supporting startups.

Both, Kenya and Rwanda are slotted at positions 62 and 84 respectively.

According to the Global Startup Ecosystem Index Report 2022 that ranked the startup ecosystems of 1,000 cities and 100 countries, Dar es Salaam was at 583rd position compared to Nairobi that was slotted at 192nd position.

The VP said banks have a crucial role to play in pushing the country status by offering affordable loans with less stringent conditions.

“This curtails young innovators’ efforts to expand further and reach a wider market. In most cases these startups die at a tender age,” Dr Mpango, a former World Bank economist, said.

The government managed to push down agricultural loans to 9.0 per cent, asking banks to come up with strategies that will further lower down the rates in other areas of economy such as mining, fishery, livestock and manufacturing.

For instance, he said, the banking sector financial service penetration in rural stands at 8.6 per cent which left many out of the bracket in financial inclusion since digitalisation is low in countryside.

Thus he called for government, public and private sectors to join hands and come up with distinguished way forward proposal and policy for uplifting the startups innovative ideas.

He praised the efforts being made by CRDB of coming up with Imbeju programme that is centred on reaching youth and women start-ups.

Imbeju trains and offers collateral free loans to the best innovative ideas from startups—especially in information technology.

CRDB Group CEO and Managing Director Abdulmajid Nsekela said at its tender age the Imbeju programme in partnership with Care International managed to reach 4,000 women registered in groups.

“To address this challenge we came up with a CRDB Foundation in our bid to extend our outreach to women and youths who are in dire need of education and relaxed loans regulations,” Mr Nsekela said.

Also in a single month since the programme was started mid-March over 700 startups have been registered for loans, market and business education.

“The financial awareness and education in the market is still very low…which resulted for bank penetration to stand at around 17 per cent and we are heading to 20 per cent,” the CRDB Chief said.

He said data show that there are merely 10 million people with bank accounts in the entire country’s banking eco-system.

“This shows there is a pressing need of financial education to people and innovative products,” Mr Nsekela said.

The bank’s chief also used the platform to inform the lender’s shareholders on the success of the completed five business plan last December and the coming of the new one themed ‘Evolve’.

The 2018-2022 business plan saw the bank profit ballooning by 875 per cent with its share price rising from 95/- to 510/- last week and dividends from 8/- to 36/-.

The IMBEJU has started with seed money amounting to 5.0bn/- for loaning start-ups of innovative youths and women.

The bank is collaborating with Information and Communication Technologies Commission (ICTC) and the National Science and Technology Commission (COSTECH) in the programme.

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