What You Need to Know
Small traders in Tanzania are struggling to access government-backed loans, with only 12 billion shillings disbursed from a 200 billion shilling allocation. Despite efforts to create favorable conditions for entrepreneurs, strict requirements and structural challenges hinder many potential beneficiaries from qualifying for these loans.
Africa-Press – Tanzania. SMALL traders and entrepreneurs are struggling to access government backed loans despite billions of shillings set aside to support their businesses, raising concerns over low uptake and existing barriers.
Officials say that out of 200bn/- allocated nationwide for interest-free loans, only 12bn/- has so far been disbursed, pointing to challenges in accessing the funds, particularly among informal traders.
Speaking during a meeting with entrepreneurs in Kahama District, the Chama cha Mapinduzi (CCM) Secretary for Political Affairs, Relations and International Cooperation, Rabia Hamad, called on business owners to organise themselves into groups to qualify for the loans provided through local councils and financial institutions.
“Under President Samia Suluhu Hassan leadership, she has created favourable conditions for entrepreneurs to access affordable financing, including partnerships with banks such as NMB,” she said.
However, officials acknowledge that strict requirements continue to limit access for many potential beneficiaries.
Speaking on behalf of the Permanent Secretary in the Ministry of Community Development, Gender, Women and Special Groups, Ms Slylivia Lusumo said traders must be formally registered and have an annual turnover not exceeding 4m/- to qualify.
She said that in Shinyanga Region, 255m/- has been allocated, benefiting 124 traders, out of 1,556 registered traders, of whom only 750 have been verified in the system.
“To obtain a loan, a trader must be registered and possess a valid identification card,” she said, emphasising the need for proper identification to improve access.
At the council level, Kahama Municipal Community Development Officer, Mr Khamis Mnubi, said 3bn/- has been allocated for the 2025/2026 financial year, with 1.1bn/- already disbursed to 57 groups in two phases between July and December.
Despite these efforts, traders say structural challenges continue to lock out many potential beneficiaries.
Speaking on behalf of the Kahama District Machinga Union (SHIUMA), Mr Barnaba Mazengo said many street vendors are unable to qualify for loans because they lack permanent business premises, including kiosks required for registration.
He added that although Kahama supports trade activities linked to eight countries, the absence of a designated trading area has left many small traders operating informally and unable to meet loan conditions.
The cost of acquiring a kiosk, estimated at 50,000/-, payable within six months, remains out of reach for many traders with limited capital.
The situation highlights the gap between policy intentions and implementation, as the government continues efforts to expand financial inclusion and empower small-scale entrepreneurs across the country.
The Tanzanian government has allocated significant funds to support small-scale traders and entrepreneurs, aiming to enhance financial inclusion and empower local businesses. However, despite these intentions, many traders face barriers such as stringent eligibility criteria and a lack of formal business registration, which limit their access to available loans. The situation underscores the ongoing challenges in bridging the gap between policy and practical implementation in the financial sector.
