SMEs

Tanzania’s Small and Medium Enterprises (SMEs)

More than 95% of businesses in Tanzania are small enterprises according to the Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA).

SMEs contribute about 1/3 of the country’s Gross Domestic Product (GDP) and are responsible for generating up to 40% of total employment.

The Tanzania Development Vision (TDV) 2025 indicates that about 54.3% of small, medium and micro enterprises (MSMEs) in Tanzania are women-led businesses and fall under the informal sector, mostly in agriculture.

They also include survivalist enterprises; whose income generation is less than the minimum income standard or poverty line. Often there are no paid employees and the asset value is minimal.

These include vendors, brokers, itinerant traders, and hawkers. Mini and micro enterprises tend to have low survivability and are difficult to target and difficult to serve.

MSMEs, also fail to secure financial resources from banks and financial institutions as these require collaterals, accurate accounting information, and documentation of borrowed projects that MSMEs are unable to provide.

In December 2016, the African Development Bank (AfDB) approved a USD 120m Line of Credit (LOC) to Tanzania to finance infrastructure and SME projects.

In April 2022, Proparco, the subsidiary of Agence Française de Développement (AFD) focused on private sector development, increased CRDB Bank’s capacity to support micro, small and medium-sized enterprises (MSMEs) in Tanzania through a credit line and portfolio guarantees amounting to TZS 182 billion.

And in July 2002, the International Finance Corporation (IFC) provided USD 100 million in loans to CRDB Bank Tanzania to increase access to finance for MSMEs enterprises in Tanzania to recover from the economic effects of the COVID-19 pandemic.

Last Updated: 8th February 2023