Inclusive Finance for Growth of Women and Youth MSMEs
About the Program
The Inclusive Finance for the Growth of Women and Youth MSMEs program is designed to address the financial and capacity barriers that limit the growth of women and youth-led enterprises in Tanzania. By offering tailored financial solutions and enterprise development, alongside evidence-based policy engagement, the program aims to enhance access to affordable financial services. Key initiatives include an Impact Grant Fund, Venture Capital and Private Equity support, and technical assistance for financial service providers. With a focus on fostering innovation and building robust financial infrastructure, the program seeks to promote inclusive and sustainable economic growth, particularly within green and circular economies. Six targeted interventions are implemented to overcome systemic barriers, enhance collaboration among stakeholders, and inform policies that support financial inclusion for undeserved communities.
Impact Grants Fund
Impact Grants Fund focuses on supporting women and youth-led MSMEs with capital and operating grants to help them start, grow, or formalize their businesses. It focuses on businesses with high potential for social and environmental impact, especially in green and digital sectors.
Impact Grant Fund
Impact Grants Fund focuses on supporting women and youth-led MSMEs with capital and operating grants to help them start, grow, or formalize their businesses. It focuses on businesses with high potential for social and environmental impact, especially in green and digital sectors.
Whose lives are we trying to improve?
The intervention is designed to improve the lives of women of all ages and youth between the ages of 18 and 35 who are operating micro, small, and medium-sized enterprises (MSMEs) across Tanzania. These enterprises may be at the start-up stage or in early growth, with significant potential for expansion, especially those contributing to the green, circular, and digital economy. By enabling these segments, the intervention aims to build inclusive economic participation across all regions of Tanzania.
What challenges are they currently facing?
The targeted beneficiaries are confronted with a range of structural and systemic challenges. These include limited access to start-up or expansion capital, low financial and digital literacy, and inadequate access to appropriate tools, equipment, and infrastructure necessary for efficient business operations. Many of these businesses operate informally, which restricts their ability to scale and access formal support systems. Additionally, mainstream financial services often impose restrictive collateral requirements and high-interest rates, rendering them inaccessible to women and youth. Limited market access and the low quality of goods and services produced further dims their competitiveness.
What Market System Change must take place to resolve the challenge?
A fundamental shift is needed in the way the market responds to the financing needs of women and youth-led MSMEs. The system must evolve to include blended finance instruments and grant-based mechanisms that address the risk barriers these enterprises face. Traditional financial instruments must be supplemented with impact-driven funding that facilitates formalization, innovation, and scale. Furthermore, institutional systems that identify, nurture, and connect high-potential MSMEs to financing and capacity-building resources need to be embedded into the wider financial ecosystem.
How will FSDT intervene?
FSDT will operationalize an Impact Grant Fund that provides both Capital and Operating Grants to women and youth MSMEs. The fund will be managed by a professional Fund Manager to ensure efficiency, transparency, and strategic impact. Capital Grants will support enterprises with investments in start-up infrastructure, equipment, and formalization processes. Operating Grants will focus on enhancing working capital to support business expansion and operations. Grant sizes will range from TZS 1 million to TZS 50 million, depending on enterprise size and the anticipated impact of the investment. Enterprises must employ or be led by at least 50% women and youth and present a robust business plan approved through technical assistance. FSDT will implement a co-investment requirement of at least 20% and integrate light technical assistance to ensure sustainability. Selected grantees will also be linked to further credit and equity opportunities where applicable.
What are we hoping to achieve through this intervention?
Through this intervention, FSDT aims to significantly expand access to catalytic finance for women and youth-led MSMEs. It is expected that the grant fund will accelerate the growth of enterprises engaged in high-impact sectors such as renewable energy, waste management, and digital commerce. This will enhance productivity and drive formalization of previously informal businesses, while strengthening the pipeline of enterprises ready for further investment from financial service providers and venture capital funds. Ultimately, this will contribute to increased financial inclusion and socio-economic empowerment.
What lasting impact do we intend to achieve?
The Impact Grant Fund is intended to build long-term financial resilience among women and youth entrepreneurs. It will contribute to job creation, increased household income, and economic diversification across underserved regions. By reinforcing the capacity of these enterprises to grow sustainably, the intervention will help cultivate a robust ecosystem of inclusive financing mechanisms. Furthermore, the Fund will demonstrate a scalable model for deploying blended finance to excluded populations, catalysing systemic transformation in the MSME financing landscape in Tanzania.
INTERVENTION PERIOD
2024 - 2027
FUNDED BY
Technical Assistance and Advisory Services
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Technical Assistance and Advisory Services
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Whose lives are we trying to improve?
This intervention is designed to indirectly improve the lives of women and youth between the ages of 18 and 35 who are entrepreneurs or business owners across Tanzania. The intervention focuses on strengthening the capacity of Financial Service Providers (FSPs) to develop and deliver inclusive, affordable, and relevant financial solutions. By building institutional capacity within the financial sector, women and youth stand to benefit from enhanced access to financial products and services that better meet their unique needs and circumstances.
What challenges are they currently facing?
Women and youth MSMEs face systemic exclusion from financial markets due to the limited capability of financial institutions to serve these segments effectively. FSPs often lack the tools, systems, and market insights required to design inclusive financial products. There is minimal use of disaggregated data in product design, limited staff expertise in serving these target groups, and weak institutional readiness to support underserved clients. These barriers lead to the continued provision of generic, inappropriate financial services that fail to reach or serve women and youth effectively.
What Market System Change must take place to resolve the challenge?
To overcome these barriers, a shift is needed within financial institutions towards inclusive product development and gender-responsive service delivery. The financial system must integrate institutional incentives that promote inclusive finance, while also building sustainable internal capacities to generate and apply market insights. The widespread adoption of practices such as gender-disaggregated data collection, user-centric product design, and human-centered delivery channels must become standard across the sector.
How will FSDT intervene?
FSDT will deploy a structured Technical Assistance (TA) and Advisory Services program targeting Tier II banks, microfinance institutions, and mobile money operators. The program will offer two key streams of support. First, institution-specific technical assistance will include capacity building for product development, systems upgrades, staff training, and improvements in internal data systems. Second, cross-sectoral knowledge generation activities will produce industry research, insights, and tools to improve market-wide understanding of inclusive finance opportunities. The TA will include pilot testing, product design workshops, policy dialogues, and support for institutions adopting inclusive financial practices. FSDT will fund up to EUR 100,000 per institution, requiring at least 25% co-financing from participating FSPs.
What are we hoping to achieve through this intervention?
This intervention seeks to expand the number and quality of financial products available to underserved markets, particularly women and youth. FSPs will be equipped with the knowledge and resources needed to develop products that are relevant, accessible, and sustainable. The program aims to increase the volume and uptake of inclusive financial services, promote innovation in product design, and strengthen partnerships across the financial ecosystem to reach underserved communities.
What lasting impact do we intend to achieve?
The intervention is expected to leave behind a stronger, more responsive financial sector with embedded practices for serving women and youth. Participating institutions will be better equipped to offer inclusive financial products beyond the life of the project, using the systems and capabilities developed through technical assistance. Over time, this will contribute to reduced exclusion, increased access to finance, and greater resilience among Tanzania’s most economically vulnerable entrepreneurs.
INTERVENTION PERIOD
2024 - 2027
FUNDED BY
Venture Capital Fund
The Venture Capital Fund is an equity financing initiative under the Inclusive Finance for Growth of Women and Youth MSMEs program, designed to support start-ups and growth-stage MSMEs with high potential. Managed in partnership with CMSA and the Ministry of Finance, the fund will provide equity investments ranging from EUR 50,000 to 250,000 to help businesses scale, innovate, and create jobs.
Venture Capital Fund
The Venture Capital Fund is an equity financing initiative under the Inclusive Finance for Growth of Women and Youth MSMEs program, designed to support start-ups and growth-stage MSMEs with high potential. Managed in partnership with CMSA and the Ministry of Finance, the fund will provide equity investments ranging from EUR 50,000 to 250,000 to help businesses scale, innovate, and create jobs.
Whose lives are we trying to improve?
This intervention is designed to improve the lives of women and youth entrepreneurs who operate start-up and growth-stage micro, small, and medium-sized enterprises (MSMEs) across Tanzania. These individuals often lead businesses in sectors such as agribusiness, technology, green innovation, and digital services, but struggle to access long-term, growth-oriented capital. By unlocking equity finance for these entrepreneurs, the intervention will create new opportunities for enterprise expansion, and innovation
What challenges are they currently facing?
Women and youth-led MSMEs face significant barriers when seeking equity investment. These include a lack of access to risk capital, limited investor interest due to perceptions of high risk and low return, weak enabling environments, and the absence of equity instruments tailored to the needs of early-stage enterprises. Additionally, many of these businesses lack investment readiness and struggle to attract investors due to inadequate advisory support and governance structures
What Market System Change must take place to resolve the challenge?
A functional and inclusive equity investment ecosystem needs to be established. This includes the development of legal and regulatory frameworks that support venture capital and private equity, the creation of credible investment vehicles, and the cultivation of investor confidence in women and youth-led enterprises. The financial market must also support technical assistance and pipeline development to ensure that early-stage businesses are equipped to engage with equity finance.
How will FSDT intervene?
FSDT will partner with the Capital Markets and Securities Authority (CMSA), the Ministry of Finance, and experienced fund managers to design and operationalize a Private Equity and Venture Capital Fund. The Fund will be capitalized through government and development partner resources and provide ticket sizes ranging from EUR 50,000 to EUR 250,000. FSDT will fund the technical design of the Fund, recruit and support the Fund Manager, and facilitate stakeholder engagement and regulatory compliance.
What are we hoping to achieve through this intervention?
The intervention aims to increase access to equity capital for high-potential, women and youth-led MSMEs and to expand the number of enterprises capable of attracting private sector investment. It will enable business growth and innovation in key sectors, enhance the capacity of enterprises to create jobs and wealth, and position Tanzania as a viable destination for inclusive venture capital investment.
What lasting impact do we intend to achieve?
This intervention is designed to leave behind a sustainable and scalable private equity and venture capital model that prioritizes gender and youth inclusion. It will stimulate systemic changes in Tanzania’s investment landscape by demonstrating the viability and impact of inclusive capital deployment. Over time, the intervention will lead to more resilient enterprises, improved livelihoods for women and youth, and greater financial sector depth. The Fund’s success will serve as a model for inclusive investing across East Africa, positioning Tanzania as a regional leader in gender-smart and youth-focused economic transformation.
INTERVENTION PERIOD
2024 - 2027
FUNDED BY
Policy Reforms
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Policy Reforms
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Whose lives are we trying to improve?
This intervention targets women and youth entrepreneurs across Tanzania who face exclusion and barriers in accessing finance due to a lack of proper understanding of the legal and regulatory frameworks. By addressing these policy bottlenecks, the intervention aims to create a more enabling environment that supports enterprise growth, inclusion, and participation in the formal economy.
What challenges are they currently facing?
Women and youth-led MSMEs often operate without a clear understanding of policy and regulatory landscape that is characterized by long licensing procedures, taxation, a poor understanding of how some of the regulations and policies speak to each other, and limited representation in policy-making spaces. These entrepreneurs are also impacted by gender-responsive frameworks and youth-inclusive financial policies, which increase their limited access to credit, capital, and formal financial services. The overall legal environment does not adequately incentivize innovation, investment, or formalization of MSMEs.
What Market System Change must take place to resolve the challenge?
For meaningful change, Tanzania’s financial sector must shift towards inclusive, evidence-based, and participatory policy-making processes. There is a need for systemic reforms that harmonise policies across sectors, integrate the voices of underrepresented groups, and incentivize the private sector to develop gender and youth-focused financial products. Government institutions must institutionalize mechanisms for regular policy review, stakeholder dialogue, and gender-sensitive impact assessment to ensure the regulatory framework evolves with market needs.
How will FSDT intervene?
FSDT will work in close collaboration with the Ministry of Finance, the Bank of Tanzania, Capital Markets and Securities Authority (CMSA), and other key public institutions to identify and review regulatory and policy barriers to inclusive finance. The intervention will involve engaging a dedicated policy expert to lead the development of reform proposals, facilitate high-level stakeholder dialogues, and produce evidence-based policy briefs and papers. FSDT will support the design and coordination of consultative processes, conduct impact assessments on existing and proposed legal frameworks, and contribute to the drafting and implementation of revised policies and regulations. The process will be closely aligned with the priorities of the National Financial Inclusion Framework III and the Financial Sector Master Plan.
What are we hoping to achieve through this intervention?
The intervention aims to reduce structural and administrative barriers that limit financial inclusion for women and youth. It will promote legal clarity, streamline regulatory procedures, and ensure that financial sector policies explicitly address the needs and capabilities of marginalized groups. Additionally, it seeks to enhance public-private collaboration in financial governance and build institutional capacity for continuous policy innovation.
What lasting impact do we intend to achieve?
This intervention is expected to institutionalize inclusive financial policymaking and improve the quality of regulation for MSMEs, especially those led by women and youth. The reforms will contribute to a more equitable financial system, reduce informality, and foster sustainable enterprise growth. Long-term, the project will help anchor Tanzania’s financial sector in principles of accountability, inclusiveness, and responsiveness enabling women and youth to access opportunities and participate meaningfully in economic development.
INTERVENTION PERIOD
2024 - 2027
FUNDED BY
Financial Systems and Data Management
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Financial Systems and Data Management
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Whose lives are we trying to improve?
This intervention seeks to enhance the economic prospects of women and youth entrepreneurs across Tanzania by improving the digital infrastructure and data ecosystems that underpin financial inclusion. The primary beneficiaries are Microfinance Service Providers (MSPs), their clients (particularly underserved MSMEs), and financial sector regulators. By improving data systems, the intervention will enable more informed decision-making, efficient operations, and better-designed financial products and policies to expand inclusive finance.
What challenges are they currently facing?
Despite their critical role in expanding access to finance, MSPs face several institutional and market-based challenges. Internally, they are struggling with high operational costs, outdated manual systems, low digital capacity, and compliance with regulatory reporting standards. Externally, there is limited real-time access to quality financial data for regulators and policymakers, which slows down effective supervision and evidence-based policy formulation. The absence of integrated, sector-wide data infrastructure makes it difficult for the Bank of Tanzania (BOT), the Ministry of Finance (MoF), and other stakeholders to monitor the performance of the microfinance subsector and respond to emerging risks.
What Market System Change must take place to resolve the challenge?
A robust centralized, data-driven financial ecosystem must be established to enhance transparency, efficiency, and innovation in the microfinance sector. This requires the deployment of shared digital infrastructure and automated systems that enable data integration, secure sharing, and regulatory alignment. Strengthened collaboration among regulators, MSPs, and government entities must also be institutionalized, fostering a culture of data-informed decision-making and improved governance.
How will FSDT intervene?
A robust centralized, data-driven financial ecosystem must be established to enhance transparency, efficiency, and innovation in the microfinance sector. This requires the deployment of shared digital infrastructure and automated systems that enable data integration, secure sharing, and regulatory alignment. Strengthened collaboration among regulators, MSPs, and government entities must also be institutionalized, fostering a culture of data-informed decision-making and improved governance.
What are we hoping to achieve through this intervention?
The intervention aims to streamline operational processes within MSPs, strengthen BOT’s supervisory capabilities, and enhance MoF’s ability to analyze sector data for effective policy formulation. Specifically, it seeks to improve compliance, reduce reporting burdens, and promote digital transformation across the microfinance value chain. It will also ensure timely access to disaggregated data, strengthen early warning systems, and improve the quality-of-service delivery by MSPs.
What lasting impact do we intend to achieve?
This intervention will institutionalize modern, interoperable data systems that support long-term digital transformation of the microfinance sector. It will establish a sustainable, integrated ecosystem where data serves as a foundation for innovation, regulation, and inclusion. The initiative will leave behind scalable models for regulatory reporting, operational efficiency, and policy analysis, helping Tanzania build a transparent, inclusive, and resilient financial system that benefits women, youth, and underserved communities.
INTERVENTION PERIOD
2024 - 2027
FUNDED BY
Enterprise Development
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Enterprise Development
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Whose lives are we trying to improve?
This intervention is focused on supporting women and youth across Tanzania who own or manage micro, small, and medium-sized enterprises (MSMEs). These individuals, particularly in underserved urban and rural areas, often face significant challenges in acquiring the business skills, networks, and support systems needed to grow sustainable and resilient enterprises. Many are engaged in informal businesses, struggling with low productivity and limited access to finance and markets.
What challenges are they currently facing?
Women and youth entrepreneurs often operate with limited financial literacy, weak digital capabilities, and inadequate understanding of compliance and governance standards. Many lack access to business development services, mentorship, and the tools needed for enterprise formalization and scale. Furthermore, they are typically not investment-ready, making it difficult for them to attract grants, loans, or equity financing. Poor record-keeping, inefficient operational systems, and restricted access to new technologies further delay their growth and competitiveness.
What Market System Change must take place to resolve the challenge?
Tanzania’s enterprise ecosystem must evolve to provide comprehensive, inclusive, and context-sensitive support to MSMEs. This involves establishing well-resourced networks of incubators, accelerators, and business development service (BDS) providers who are equipped to address the diverse and evolving needs of entrepreneurs at different stages of growth. The market must also integrate entrepreneurial education, digital innovation, and mentorship into standard business development practices, with targeted outreach to women and youth.
How will FSDT intervene?
FSDT will develop and roll out an enterprise development programme that delivers end-to-end support to MSMEs through structured training, mentorship, and tailored advisory services. The programme will be delivered through a network of local BDS providers, incubators, and accelerators who will be trained and resourced to provide relevant, high-quality services. Interventions will include training on business planning, financial management, digital adoption, marketing, regulatory compliance, and customer relationship management. Participating in MSMEs especially those receiving funding through FSDT’s grant or equity instruments, will also benefit from investment readiness coaching and linkages to potential financiers.
What are we hoping to achieve through this intervention?
The intervention seeks to improve the business capabilities and resilience of women and youth-led MSMEs. By increasing enterprise competitiveness and financial literacy, the programme will prepare these businesses to better absorb and utilise financial support. It will also enhance formalisation, boost productivity, and promote digital integration among MSMEs. Over time, the programme is expected to strengthen the quality of the pipeline of investable businesses and foster innovation and sustainability across Tanzania’s enterprise landscape.
What lasting impact do we intend to achieve?
The Enterprise Development Programme will establish a strong foundation for inclusive business growth in Tanzania. It will result in a vibrant ecosystem of support services that continue to empower women and youth entrepreneurs long after the project ends. The intervention will leave behind a network of capable BDS providers, scalable enterprise support models, and a culture of continuous learning and innovation among MSMEs. Ultimately, it will contribute to increased economic inclusion, job creation, and sustainable livelihoods for women and youth.
INTERVENTION PERIOD
2024 - 2027
FUNDED BY
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