Browsing: Small and Medium Enterprises

The Tanzania Finance Act 2022 was assented on June 30, 2022, and has been effective since July 1, 2022.

The Finance Act 2022 has been received with the sentiment that more could have been done to improve the business and investment environment namely undoing the many damaging laws that exist which make doing business in Tanzania perceived as highly risky by investors.

I will focus on the six areas of the law and attempt to analyse what the law means and its impact.

  1. Entrepreneurship, Start-ups and SMEs

Firstly, I am a strong believer that poverty alleviation will be accomplished not by large foreign investors and multinational companies coming to invest in Africa, but by empowering the smaller companies and entrepreneurs who exist in millions and make up the largest proportion of the private sector in Tanzania. According to the Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA), 95% of …

  • The most significant restriction to SMEs thriving in Africa is access to capital, with a massive gap in funding widening globally between these enterprises and large firms
  • IFC notes that the global gap in funding between SMEs and big companies is around US$5.2 trillion
  • Small and Medium Enterprises represent about 90 per cent of businesses and more than 50 per cent of employment worldwide

Micro, small and medium enterprises (MSMEs) remarkably contribute to the socio-economic infrastructure in both developed and developing countries, especially in the transition from planned to market-oriented economies. The most significant restriction to the thriving of SMEs, in Africa specifically, is the access to capital, with a massive gap in funding widening globally between these enterprises and large firms.

Small and Medium Enterprises are vigorously turning to alternative sources of funding. The world is witnessing an indispensable need for a collaborative effort to help SMEs address the …

  • AIM is directing more energy towards empowering small and medium enterprises (SMEs) as they constitute the majority of businesses globally
  • Small and Medium Enterprises are also critically important for driving global economic growth and achieving global Sustainable Development Goals
  • With the vision of AIM 2022 to better the global economy, it dictates that they will have something on the table for SMEs as the engines of the economy of emerging and developed markets

The Annual Investment Meeting (AIM 2022) has been a platform geared towards bettering the economic and social outlook of the world since the first day of its launch.

Under the patronage of His Highness Sheikh Mohammed bin Rashid Al Maktoum, the Vice-President and Prime Minister of the UAE and Ruler of Dubai, AIM believes that they have the strategy and the data to sustain the development progress already displayed, especially through the empowerment of Small and Medium …

  • MSMEs account for 90 per cent of businesses and 80 per cent of employment in East Africa.
  • EAC Partner States still have a critical role in enabling MSMEs growth to ensure long term sustainability and recovery.
  • Partner States should encourage research and development as requisites for innovation and growth.

The EAC Secretary General Dr. Peter Mathuki says that Micro, Small and Medium Enterprises (MSMEs) play a crucial role in the economic development of East African countries.

MSMEs account for 90 per cent of businesses and 80 per cent of employment, especially among youth and women.

Speaking during the official opening of the 21st MSMEs Trade Fair at Rock City Grounds, Mwanza, United Republic of Tanzania, Dr. Mathuki reiterated that EAC Partner States still have a critical role in enabling MSMEs growth to ensure long term sustainability and recovery by promoting programmes that prioritise MSMEs to spur demand for quality …

The Kenyan economy contracted by an estimated 1 per cent in 2020 compared to a 5.4 per cent growth in 2019 according to the World Bank.

The contraction came in as the economy took a hit from Covid-19 which led to reduced consumer demand both globally and locally, disruption of supply chains, job losses coupled with the Covid-19 prevention measures announced by the government.

Most economic activities in the service sector that demand manufactured goods such as the hospitality industry came to a near halt.

Read: Evaluating Kenya’s new digital economy blueprint

There is optimism that there will be a recovery in 2021 with economic output forecasted to rebound with real GDP increasing by 6.9 per cent on the assumption that there will be increased domestic and global demand following the easing of containment measures and increased international travel.

The East African economy is expected to experience normal weather that …

Financial inclusion in Africa

Last month, Mastercard announced a partnership with Samsung, Airtel Africa and Asante Financial Services Group to launch a Pay-on-Demand payments platform and drive the digital economy across Africa.

By enabling digital access to everyday products and services for under-served consumers and micro, small and medium enterprises (MSMEs), the continent could experience positive economic growth covering even the poorest which has been elusive for decades.

The International Finance Corporation (IFC) notes that the launch and growth of digital financial services has led to an unprecedented increase in the number of people enjoying access to formal financial services.

Read: Tanzania shines for financial inclusion in Africa

Today, Africa has more digital financial services deployments than any other region in the world, with almost half of the nearly 700 million individual users worldwide.

Mobile money solutions and agent banking remain the most preferred since they now offer affordable, instant, …

Agriculture remains Africa’s saving grace in the face of the upheaval occasioned by the Covid-19 pandemic.

With this, agritech becomes all the more important in the sector that remains the biggest employer on the continent of 1.2 billion people.

Dwindling productivity occasioned by climate change effects, pest and diseases, and post-harvest losses is still a huge challenge for farmers on the continent which is increasingly importing what it should be producing.

Two years ago, AfDB President Akinwumi Adesina called on farmers to acquire new technologies to transform agricultural production.

Read: AfDB President: Africa should feed the world not importing US$ 35 billion food annually

He said that due to the limited capacity of production, Africa was falling behind in becoming the breadbasket of the world. For perspective, the continent spends an upwards of US$ 35 billion per year importing food.

Speaking at an Agriculture conference in the U.S., Adesina said …

The East African economy was projected to grow impressively this year but the Covid-19 pandemic has become a damper to the region’s outlook. 

However, while the virus is estimated to wipe off billions of dollars from the global economy, there is hope that the East African region will remain resilient in the face of the pandemic.  The EAC has been outpacing other regions on the continent defying natural law expectations. 

2020 is no different. 

According to the African Development Bank (AfDB), the economic disruption caused by the Covid-19 pandemic has slowed the region’s growth projec...

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As Kenya’s SME sector grows through a tough economic time, mentors are increasingly targeting the sector to offer guidance to small businesses.

The latest entrant is Wylde International which has invested Sh50 million in a one-stop-shop entrepreneurs centre in Nairobi dubbed SNDBX.

SNDBX gives entrepreneurs and SMEs timely and personalised access to round the clock business growth experts to help face challenges they are experiencing.

The centre is an all-access pass to more than 20 experts including finance, human resources, tax, legal, branding, marketing, debt collection, innovation, governance and risk management among others.

Speaking during the launch, Wylde International Chief Executive Joram Mwinamo, said the move was necessitated by the need in the market to help entrepreneurs scale up.

“An environment where ambitious entrepreneurs have a supporting cast of seasoned professionals. The SNDBX is a First of its kind in the world, developed over 10 years of working with entrepreneurs, …

Absa Bank Kenya has announced a Ksh10 billion fund to advance credit to women-owned small and medium enterprises over the next five years.

The kitty comes as part of the new customer value propositions under the Absa brand.

The women fund is part of the bank’s commitment towards advancing diversity and inclusion by empowering women with financial resources and capacity building to grow their businesses.

The money will be availed to women entrepreneurs through the existing banking products including unsecured and secured loans, trade finance, asset finance, property finance and working capital facilities.

“Women form over 50 per cent of the local and global population and account for a significant percentage of the SME sector. However, their participation in the national economic development is often stifled by limited access to financial resources and social-cultural restrictions. We are confident that this proposition, coupled with the additional interventions we continue to make, …