The European Union (EU) held an information session titled “Grow with the European Union Finance” in Tanzania, focusing on financial opportunities for local businesses under the Global Gateway strategy. This session built on discussions from the Tanzania-EU Business Forum in February 2023, which highlighted the need for improved access to finance.
The European Union (EU) recently conducted a highly productive information session titled “Grow with the European Union Finance,” aimed at empowering Tanzanian businesses to seize numerous financial opportunities offered by the EU and its Member States under the Global Gateway strategy.
Building on the successful dialogue with the private sector initiated during the Tanzania-EU Business Forum in February 2023, this session focused on addressing one of the main obstacles identified back then: access to finance for scaling up emerging business, trade, and investment opportunities. During the February forum, several financing deals were signed between European Development Banks and local Tanzanian banks (NMB, CRDB, KCB), expanding credit offerings for Tanzanian MSMEs. Since then, the range of European financing windows dedicated to the private sector has been steadily increasing.
The primary objective of this information session was to provide concrete guidance on the available financing instruments and the process of accessing these funds. A significant highlight was the signing of a new financing tool grant contract worth TZS 11.23 billion (EUR 4 million) between the EU and the Financial Sector Deepening Trust (FSDT), aimed at promoting inclusive finance for small and medium-sized enterprises (SMEs) operated by women and youth.
Over 100 representatives from the banking sector, SMEs, MSMEs, and various corporate enterprises participated, emphasizing the critical demand for local businesses to connect with EU-catalyzed financiers through the Global Gateway financing tools.
Cedric Merel, Head of Cooperation for the EU Delegation to Tanzania, emphasized the EU’s comprehensive support for the Tanzanian business environment. “A conducive business environment is essential for businesses to thrive, and finance is their lifeblood,” Merel remarked, adding, “The European Union has provided a 360-degree approach to investments in Tanzania, from supporting the Blueprint regulatory reform agenda, enhancing Domestic Resources Mobilization, to strengthening Capital Markets and green and alternative finance as well as attracting international finance.”
Edward Claessen, Head of the Regional Hub for East Africa at the European Investment Bank (EIB), reinforced this message by highlighting the EIB’s significant support for private sector initiatives in Tanzania.
“Last year, Tanzania was the largest recipient of EIB support in Sub-Saharan Africa, with TZS758 billion (EUR 270 million) in new investments to support businesses through partnerships with Tanzanian banks such as CRDB, NMB, and KCB-Tanzania,” Claessen stated.
‘’Of what we have signed, EUR 166m has already been disbursed by the EIB to the banks and has been lent to over 10,000 final beneficiaries out of which over 3,000 are women-led enterprises and over 900 are blue economy enterprises and co-operatives in Zanzibar, “ he added.
The information session provided insights into the EU’s Global Gateway strategy, which aims to address global challenges like climate change, health system improvements, and strengthening global supply chains. This strategy includes a variety of financial products, such as grants, loans, equity, and guarantees, designed to benefit businesses of all sizes.
A key part of this strategy is the European Fund for Sustainable Development Plus (EFSD+), which encourages sustainable investments in partner countries by offering risk-sharing tools through partner Financial Development Institutions. With up to TZS 112.340 trillion (EUR 40 billion) in financial commitment, EFSD+ aims to mobilize up to TZS 379.150 trillion (EUR 135 billion) in public and private financing worldwide to support the Sustainable Development Goals (SDGs).
Aside from the EFSD+, the EU also supports start-ups and early-stage SMEs through initiatives like the Funguo Innovation Programme, PesaTech Accelerator Program, and Serengeti Business Angels Network, which offer grants and investment opportunities. Additionally, EIB, the EU’s lending arm, provides credit lines to local banks, which then lend to SMEs, helping them grow and innovate.
Gasper Mdee, a representative from the Tanzanian Private Sector Foundation said financial opportunities offered by the EU are key in fostering a thriving entrepreneurial ecosystem in Tanzania.
“In partnership with the local private sector organisations, by focusing on focusing on inclusive growth, the EU ensures that diverse segments of the population, including underrepresented groups such as women and youth, have access to the resources they need to succeed. This support not only boosts individual businesses but also contributes to the overall economic development of the country.” said Mdee.