On 23rd November 2024, the EU-funded FUNGUO Program, in collaboration with CRDB, Tanzania’s largest bank, unveiled the third cohort of 18 startups and innovative SMEs.
FUNGUO aims to foster innovation and entrepreneurship, providing financial and technical support, and attracting private investment.
The cohort, selected through a competitive process following the third Call for Funding Applications launched in September 2024, emerged from over 400 nationwide submissions.
The initiative boasts a funding pool of TZS 1.45 billion in FUNGUO Catalytic Grants and TZS 355 million in CRDB’s iMBEJU Soft Loans.
The selected startups span various sectors, including agriculture, energy, circular economy, healthcare, and financial services. They often leverage technology to tackle societal challenges while creating employment opportunities.
In addition to funding, the startups will receive tailored technical assistance, visibility opportunities, and investment profiling to accelerate growth and attract further investment.
Furthermore, 40% of the funds are dedicated to women-led or women-founded businesses, emphasizing gender inclusivity as a cornerstone of Tanzania’s innovation ecosystem.
At the unveiling event, Tanzania’s Minister of Information, ICT, and Communication, Hon. Jerry Silaa highlighted: “Innovation is the backbone of our nation’s progress. Today, we celebrate the bold ideas and entrepreneurial spirit driving Tanzania’s future. The Ministry is committed to supporting initiatives like this to empower startups and build a digital and inclusive economy.”
On her part, the EU Head of Delegation Ambassador Christine Grau emphasized the European Union’s commitment, noting, “With over TZS 1 trillion allocated to private sector development, we are fostering an ecosystem where entrepreneurs can thrive and create sustainable jobs for youth.”
UNDP Resident Representative Shigeki Komatsubara echoed the importance of investing in young talent, saying, “Through initiatives like FUNGUO, we are unlocking the potential of Tanzania’s youth, ensuring they can innovate, grow, and shape our economic future.”
This milestone reflects the strength of collaboration between development partners, the private sector, and the government in driving entrepreneurship, creating jobs, and advancing progress towards the SDGs.
SMEs in Tanzania
According to the Tanzania Chamber of Commerce, Industry, and Agriculture (TCCIA), over 95% of businesses in Tanzania are small enterprises.
SMEs contribute around one-third of the GDP and generate up to 40% of total employment.
However, SMEs struggle to secure financial resources from banks and financial institutions as these require collaterals, accurate accounting information, and documentation of borrowed projects that SMEs are unable to provide.
Addressing this challenge, the FUNGUO Program aims to support at least 100 start-ups with flexible financing and technical assistance. By 2024, the Program has created 4,000+ jobs and invested over US$ 1.3 million in 43 ventures.
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