Dar es Salaam — Tanzanian entrepreneurs are expressing renewed optimism after the government and the banking sector unveiled new reforms and financing mechanisms designed to ease access to credit for small and medium-sized enterprises (SMEs).
The reforms, part of broader efforts to revitalize private sector growth, come at a time when many local businesses continue to grapple with tight lending conditions, limited collateral, and volatile market conditions exacerbated by regional and global economic shifts.
According to the Bank of Tanzania (BoT), more than 70 percent of SMEs in the country face financing challenges, despite being the backbone of Tanzania’s economy, contributing nearly 35 percent of GDP and employing millions across manufacturing, services, and agriculture.
The BoT recently announced a Special Credit Guarantee Scheme aimed at encouraging commercial banks to lend more to SMEs, startups, and women-led enterprises. Under the scheme, the government will cover up to 50 percent of potential loan losses, reducing risk for lenders.
“This initiative reflects our commitment to empower local businesses and strengthen Tanzania’s industrial base,” said BoT Governor Emmanuel Tutuba. “We believe access to affordable finance is the key to sustainable growth and job creation.”
In parallel, several major commercial banks — including CRDB, NMB, and NBC — have launched SME innovation hubs and digital credit solutions to streamline loan approvals, especially for entrepreneurs in rural and peri-urban areas.
NMB Bank’s new digital platform, “NMB Biashara Booster,” uses data analytics to evaluate loan eligibility based on mobile money and sales transaction history, reducing the need for traditional collateral.
“We’re moving from collateral-based to character-based lending,” said NMB Head of Business Banking, Lilian Laiser. “This is crucial for small traders and farmers who have potential but lack formal assets.”
For business owners like Mariam Nchimbi, a Dar es Salaam-based agro-processor who has struggled for years to secure loans, the new measures represent a long-awaited lifeline.
“Banks have always asked for land titles I don’t have,” Mariam said. “If these new policies really support small businesses like mine, it could change everything — we’ll finally be able to expand production and create jobs.”
While the new reforms are widely welcomed, analysts caution that deeper structural barriers — such as high interest rates (currently averaging 16–18 percent for business loans), limited financial literacy, and bureaucratic bottlenecks — continue to constrain growth.
The Tanzania Private Sector Foundation (TPSF) has urged the government to complement the credit reforms with fiscal incentives, faster business registration processes, and better infrastructure.
“Access to finance must go hand-in-hand with a conducive business environment,” said TPSF Executive Director Raphael Maganga. “Otherwise, the benefits will be short-lived.”
Tanzania’s push for inclusive financing mirrors trends in Kenya, Rwanda, and Uganda, where similar credit guarantee and fintech-driven initiatives are reshaping access to capital. However, experts believe Tanzania’s approach — anchored in public-private collaboration and digital transformation — could give it a regional advantage.
According to the World Bank’s 2025 Economic Update, Tanzania’s SME sector could grow by over 40 percent in the next five years if financing reforms are fully implemented and accompanied by supportive trade policies.
“We’re witnessing a turning point in how Tanzania’s economy empowers its entrepreneurs,” said Dr. Asha Mushi, an economist at the University of Dar es Salaam. “The focus on inclusive, tech-enabled finance could unlock enormous potential.”
As the government targets a 7 percent GDP growth rate by 2026, experts say strengthening the SME ecosystem will be critical to achieving the goal. Beyond credit access, stakeholders are also calling for increased investment in financial literacy, women’s entrepreneurship, and youth-focused business training.
“This is not just about loans — it’s about building confidence in Tanzanian enterprise,” said Dr. Mushi. “When local businesses thrive, the entire economy becomes more resilient.”
