TANZANIA has thousands of young men and women engaged in the informal sector as small entrepreneurs.
Today the informal sector is perhaps the solution to the looming labour crisis facing school leavers and graduates of high-learning institutions.
However, entrepreneurs operating in Tanzania currently face multiple challenges that range from lack of alternative capital, to skilled labour, and other business tools needed to thrive.
Entrepreneurs trying their luck in agriculture currently have no access to long-term and alternative financing for entrepreneur- ial ventures. Between 80 to 90 per cent of the financing needed to kick-start investments has always come from financial institutions such as banks.
That is very costly. For a business or startup that has a viable idea and wants to try it, it becomes almost impossible for them to get a financial facility. Banks have high collateral requirements and are therefore often inaccessible for start-ups and Micro, Small and Medium Enterprises (MSMEs).
The collateral requirement may be 120 per cent of the loan amount. In an environment that addresses such challenges, entrepreneurs believe they can thrive to be profitable, create job opportunities, and contribute to promoting economic growth. It is perhaps what drove the government to put in place a new policy aimed at promoting entrepreneurship development in the country.
There are a number of issues that need to be addressed faced by entrepreneurs. Such issues include human capital management, business support, financing, as well as markets and value chains. The objective is to ensure that all pillars of the entrepreneurship ecosystem function properly.
This would allow Tanzanian startups, micro, small and medium-sized business, and large enterprises achieve sustainable growth as well as be profitable.
Tanzanians engaged in the formal sector are looking at en- hancing entrepreneurial skills, advisory services, creating a more conducive environment, and facilitating entrepreneurs to access markets.
Policy actions have been directed towards making sure that issues within the entrepreneurship ecosystem are addressed.