Tanzania’s ICT Entrepreneurs Ripe for Funding

Mpesa APP
Access to funding is crucial for any antrepreneur

Information and Communication Technology entrepreneurs in Tanzania now have a flicker of hope ushered in by the announcement of an innovation fund which is on the horizon.

The Commission for Science and Technology of Tanzania (COSTECH) Director General, Dr Hassan Mshinda, said on Saturday’ that discussions are underway with some development partners in a quest to establish the initiative. “We are in discussions with Canada, Ireland and UK and they have expressed interests on coming on board as long as the government is also behind it,” he said.

Dr Mshinda said that ICT entrepreneurs in the country are disadvantaged in that access to finance is a stumbling block for them. They are not mature enough to get funding. He said that the national science and technology innovation fund is based on research and development, but the innovation fund would have a whole value chain in that one doesn’t need to have a business or market plan.

“What we hope to achieve from the innovation fund is first and foremost provide financial backing for ICT developers, but most importantly to go a step further using research results and turning them into business opportunities,” he explained. The Dar Teknoloma Business Incubator (DTBi) Chief Executive Officer, Eng George Mulamula, revealed that the fund would be under the incubator and it would be specifically for technology start-ups that go through a rigous Business Development Scheme (BDS), with the objective of making start-ups well rounded to conduct entrepreneurial business.

Eng. Mulamula explained that for one to have access, one has to go through the BDS as there is need to ensure that the applicant is passionate about their business and committed to succeed, regardless of the challenges faced, which may include failing. “One will also need to have an idea or proposal which solves a social problem or helps the community. This can be turned to a money making venture by the applicant,” he explained.

He said that the innovation fund will be legible to the ICT sector as it is marginalised in getting start-up capital and so the fund would target this group though it would assist those also in the technology sphere. “BDS provides learning in business plan writing, accounting, exhibition styles, office management, understanding the tax system, financial planning, soft skills capacity building and there is monitoring and evaluation to make sure key performance indicators are attained,” he elaborated.

Eng. Mulamula admitted that access to finance wasn’t the biggest challenge that entrepreneurs faced but said it was one of them, others being pitching, public speaking, capacity absorption, language and that the BDS mechanism was meant to address most of these challenges. The Deputy Minister for Communication, Science and Technology, Mr January Makamba said on Thursday (during a training launch for ICT developers) that the fund would provide some cushion to start-ups and help them progress economically.

Mr Makamba said that the ministry would do their part to set up a proper enabling environment for the growth and enhancement of ICT activities in the country. “Our goal and challenge is to develop critical ICT human resources almost at all levels and bridging the digital divide gap (rural vs. urban and penetration vs. relevant applications),” he said.

He reaffirmed that the government would continue investing in ICTs as an important part of national growth plan. Mr Makamba said that of particular relevance to the development of applications, the government would speed up efforts of making available previously offline local content available online and believes that the availability of data would serve to encourage applications development.

“The government will continue to play a role in the growth of ICT in the country and along those lines which underline our commitment at all levels to mainstream ICT as a tool for socio-economic development and transformation,” he said. He asserted that policy framework and structures already existed but was quick to add that part of the challenge was to enhance them, to help ICT start-ups and entrepreneurs transform their ideas into viable business ventures, which would enhance their ability to reach their entire potential for expansion.

Training and incubation can do a lot to support entrepreneurship, but by the end of the day the business environment and access to finance were critical for the success of failure of new business enterprises. It is the role of the government to ensure an environment that is conducive for the Tanzanian business to grow, create employment and wealth that Tanzania desperately needs to succeed in the fight against poverty.”