Dodoma – The Tanzanian government has set aside Sh5 billion to provide financing to young information and communication technology (ICT) companies as part of a new programme aimed at turning local innovations into sustainable businesses.
The government launched the ICT Startup Capital Empowerment Programme on Friday, targeting young companies developing digital solutions in sectors including financial technology, legal services, entertainment, agriculture, tourism, insurance, education, logistics, digital services and e-commerce.
Launching the programme, Minister for Communication and Information Technology Angellah Kairuki said the initiative was designed to give startups the capital they need to grow, strengthen their competitiveness and access both domestic and international markets.
“The loans will be provided in three categories: small loans ranging from Sh1 million to Sh25 million, medium loans of more than Sh25 million to Sh50 million, and large loans of more than Sh50 million to Sh100 million, subject to the established criteria and conditions,” Ms Kairuki said.
The Sh5 billion has been allocated through the national empowerment fund, with implementation to be undertaken in collaboration with Azania Bank. The programme particularly targets youth-owned startups with innovative products and services.
For some young innovators, the programme comes at a time when lack of capital remains one of the biggest obstacles to moving their ideas beyond the testing stage.
At just 17, Khudrath Said, a student at Mbeya University of Science and Technology (MUST), has developed an app called Pillbox, which is designed to remind patients to take their medication.
“Some people have difficulties remembering to take their medication. In the next versions, doctors could be connected to the app and prescribe medication through it, so that when a patient goes to a pharmacy, they would not need to carry paper prescriptions. For now, it is in the testing phase,” he said.
Khudrath said access to financing would help young innovators take their projects to the next level.
“Through this programme, we can get more capital and develop our work beyond the level we have reached with the initial funding,” he said.
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Another young innovator, 18-year-old Yusuph Khamis from Karume Institute of Science and Technology in Zanzibar, has developed Tanzania Transparency, a digital platform designed to help young people access information about government and civic affairs through gaming.
Khamis said he designed the platform after observing that many young people spend considerable time playing games rather than seeking information.
“I decided to put the information into a game that young people can play. The game has different levels, and when a player reaches a certain level, they receive rewards. For example, a player who wins can receive one gigabyte of internet data,” he said.
He said funding would enable him to host and develop the platform so it could reach more young people.
“If the government accepts the programme, it will help young people increase their understanding of issues that affect us as citizens. The capital will enable me to host the programme. Without funding, I cannot host it,” he said.
For trainers and educators, the initiative also represents an opportunity to extend technological innovation beyond major urban centres.
Protas Mapunda, a science and technology trainer, said government investment in technology could accelerate development while giving young innovators an opportunity to take digital solutions to rural communities.
“If we have technology, development will follow. Capital has been a major challenge for us. This programme gives young people an opportunity to develop their innovations and eventually take technology to rural areas,” he said.
Chairman of the ICT Commission Board, Dr Henry Mwanyika, however, reminded beneficiaries that the money provided under the programme would be loans, not grants or donations.
“Every shilling that is repaid will open an opportunity for another young person,” Dr Mwanyika said.
The government said the success of the programme would therefore not be measured by the amount of money disbursed alone, but also by the number of startups financed, businesses that grow, jobs created, increases in sales and revenues, expansion into new markets and the rate of loan repayment.
Ms Kairuki said the government would seek to ensure that the financing process was fast, efficient, productive, transparent and accountable, while eliminating unnecessary bureaucracy.
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“The funds must be directed towards the intended activities and produce the results outlined in the business plans submitted. We want to see startups using these funds to grow, employ more people, increase their customers, enter new markets and build sustainable businesses,” she said.
She directed innovators and startups targeted by the programme to register through the Jamii Hunt system, which she described as the official platform for identification and submission of applications.
She also directed the ICT Commission to complete guidelines enabling young ICT companies to participate in government procurement and submit them to the Public Procurement Regulatory Authority for further action.
The minister further directed the ministry, ICT Commission and Azania Bank to establish a system for measuring the programme’s outcomes, including business growth, employment, sales, market expansion, new products and services and loan repayment.
She called for public education to ensure that innovators understand the eligibility criteria, application procedures, obligations of beneficiaries and benefits of the programme.
“Those who receive the loans should use them for their intended purposes, grow economically, seek markets within and outside the country, and contribute to the growth of Tanzania’s ICT sector regionally and internationally,” Ms Kairuki said.
Jackline Kuwanda is a journalist for The Chanzo based in Dodoma. You can reach her at: jaquelinevictor88@gmail.com.
