THE government has started preparations for drafting the new National Development Vision 2025-2050, which prioritises, among others, technological development, particularly in the financial sector.
This was revealed by a Ministry of Finance and Planning official, Mr Mursal Milanzi, while gracing the workshop on research findings on crowdfunding for youth entrepreneurship in the country, which is in line with the national agenda of improving access to capital.
“We have started preparations for a new national development vision, as well as reviewing the current one, which comes to an end in 2025. The new development vision 2025- 2050 among the areas of focus will be technological development in the financial sector,” he told the workshop.
Mr Milanzi commended Mzumbe University for the initiative to spearhead the ‘Crowdfunding for Youth Entrepreneurs in Tanzania’ (C4YET) project.
According to him, crowdfunding is the use of small amounts of capital from a large number of individuals to finance a new business venture.
“The forthcoming vision will also address a number of issues, but for the financial sector, it will embrace technology, financial inclusion and crowdfunding,” he said.
Mr Milanzi said research remains key in the financial sector development, since the findings will enrich the government in formulating policies and regulatory framework, aimed at promoting innovative and customer centric financial products.
The Ministry of Finance and Planning in collaboration with the sector regulators has developed a ten years ‘Financial Sector Development Master Plan’, which seeks to facilitate an increase in the number and diversity of financial products and services. He said as part of the implementation of the master plan, the ministry has developed and it implements an alternative project financing strategy, crowdfunding being one of the options.
“This initiative is a milestone in the implementation of the targets outlined in the Tanzania Development Vision 2025 and the Third Five-Year Development Plan (FYDP III), which identify non-traditional and innovative sources in funding the development projects” said Mr Milanzi.
He argued that crowdfunding drives poverty reduction in a number of ways as they facilitate efficient mobilisation and channelling of savings towards growing companies as well as reduce the vulnerability of some poorest people by matching individuals requiring finance.
He added that the financial sector is key in facilitating economic growth and development, thus an inclusive financial sector means inclusive development and less poverty.
Mr Milanzi said the government has been taking a number of measures and interventions to promote financial inclusion, which has been instrumental in promoting the use of financial sector technology and innovations including crowdfunding thus reducing financial exclusion.
He called for ideas on how to make the financial sector work for women and youth, using innovative ways of crowdfunding in project financing, as among other things, it will curb corruption, illicit financial flows, increase transparency and improve government revenue collection.
“I hope that each one of us will be at the forefront of promoting crowdfunding, including reflecting it in our curricula as more than 30 per cent of youth are totally excluded from the financial system,” he insisted.
Earlier, Mzumbe University Acting Vice-Chancellor, Prof William Mwegoha said the Crowdfunding for Youth Entrepreneurs in Tanzania’ (C4YET)” seeks to generate an understanding of crowdfunding as an effective funding mechanism for (youth) entrepreneurs.
Mzumbe University, Small Industries Development Organization, and Copenhagen Business School have been undertaking various research projects, addressing the question of how youth entrepreneurs in the country can improve their access to capital through crowdfunding.
The project funded by the Danish government started in 2019 and will expire in 2024 at the tune of 2.46bn/-. Under the project, they have been conducting research in Dar es Salaam, Morogoro Arusha, Mbeya and Mwanza on youth understanding on crowdfunding.
He said improving access to financing for youth entrepreneurs in the country is important as they represent a large and untapped potential for new venture creation, while facing steep access barriers to capital as they mainly operate on the fringes of the economy.