Tanzania to build capacity among small and medium enterprises
June 03, 2013
Small and Medium enterprises are a key driver of economic growth across Africa. Unfortunately, many businesses operate informally due to lack of information, red tape and high costs involved in formalizing a business. This makes it difficult for these businesses to access finance as well as opportunities to transfer knowledge and skills that could lead to better business management, expansion and eventually economic growth. A large informal sector also leads to lower tax revenues, therefore hindering effective reinvestment into the economy.
The Investment Climate Facility for Africa has partnered up with the Government of Tanzania on a pilot project that aims to build the capacity of Small and Medium Enterprises (SMEs) so that they can move from operating informally, and gain from the benefits of being part of the formal economy.
The project will develop a management and entrepreneurial skills training program for small enterprises with a specific focus on financial education and business skills. It will also train and register Business Development Services Providers (BDSPs) who will serve as capacity building facilitators for small and medium entrepreneurs.
By June 2014, a total of 500 SME owners in Mwanza and Dar es Salaam are expected to have received business management training, registered their businesses formally, and have active bank accounts. Registered Business Development Service Providers are also expected to be accessible in Dar es Salaam and Mwanza.
The implementation of this project, and lessons learnt, will inform a business model for capacity building which can be rolled out on a wider scale. This is expected to lead to increased formalization of the economy, creation of more jobs, and widening of the tax base.
This will be the first project funded by ICF which specifically focuses on the SME sector.