Unlocking the Economic Potential of Women Entrepreneurs in the Dryland Regions of Tanzania

A woman entrepreneur in Tanzania holds up milk from her dairy business.
Esther Majinja runs a small-scale dairy processing enterprise in the Manyara region of Tanzania.

In the dryland regions of Tanzania, women-owned businesses face numerous challenges that are unique to their environment. Esther Majinja runs a small-scale dairy processing enterprise in Babati within the Manyara region and knows this all too well.

“Climate change makes it hard for our dairy business. We need plenty of milk supply to be able to keep up with the demand, but with things changing so much, it’s tough to keep the business up and running smoothly.”

– Esther Majinja

The Manyara region is characterized by prolonged periods of drought, floods, and extreme temperature variations, making it difficult to operate a dairy business. One of the major challenges Esther and other entrepreneurs face is the scarcity of fodder, which directly affects the productivity of their cattle and leads to a decrease in milk supply. Additionally, the dry season brings about a rise in milk prices, requiring a significant amount of investment capital to cope with the higher production costs.

Despite these obstacles, there is hope for entrepreneurs like Esther in the arid and semi-arid regions of Tanzania. MEDA’s Feminist Entrepreneurs Growing Green Economies (FEGGE), a project funded by the Government of Canada, is providing much-needed business development support and growth opportunities by creating an improved enabling environment for women-owned businesses.

Strengthening women’s resilience during the dry season

One of the project’s initiatives has been to ensure that feminist small and medium-sized enterprise (F-SME) owners like Esther and other livestock farmers across the dairy supply chain have reliable fodder for their cattle during the dry season. With support from the project, F-SMEs have begun cultivating their own fodder, ensuring a steady supply during dry spells. This has been achieved through the establishment of demonstration plots, where varieties of feed and production methods and techniques are shown, aiding in their adoption and enabling access to quality feed seeds.

Through the project, livestock keepers have gained access to six different fodder seed varieties, rigorously tested and demonstrated on the plots.

Training sessions on fodder production have been coupled with training on techniques for water conservation, equipping F-SMEs and smallholder livestock keepers with necessary tools for irrigation. Moreover, the project has forged partnerships with Quick Start, a company distributing “Money Maker” pumps, to supply irrigation equipment. The partnership has targeted women entrepreneurs through the SMART incentives subsidies mechanism grant – a program providing a price discount incentive to women entrepreneurs to purchase agricultural inputs at a subsidized cost – bringing about economic empowerment within the communities.

Tackling gender-based obstacles for women-led agribusinesses

Extending beyond the dry season alone, most women-led agribusinesses in the region are consistently undermined by a lack of formal credit history, limited land ownership, weather irregularities, limited participation in decision-making, and limited knowledge of business procedures. These obstacles have hindered their participation in the business ecosystem.

Gender norms, power imbalances, investment regulations, and biased attitudes towards women entrepreneurs further complicate access to financial resources and financial services […]”

– Paulina, rice processor and FEGGE client in the Tabora region

To address these challenges, the FEGGE project has empowered Tanzanian women to attain financial freedom and transform their small and medium-sized agribusinesses. Through customized business development services (BDS), FEGGE has been instrumental in preparing F-SME owners like Esther for investment. The project has also addressed supply-side gaps by strengthening the capacity of financial institutions to develop gender-responsive and climate-smart products and services to enable F-SMEs to increase their agricultural productivity and incomes.

Small-scale beekeepers are taught the importance of wearing Personal Protective Equipment (PPE) for safety.

The road to economic independence

Over the last three years, FEGGE has supported over 170 F-SMEs, operating in the dairy, rice, sunflower, maize, honey, horticulture, and spice value chains, to improve their business performance and access financing through a customized BDS program. The program focuses on supporting business formalization, legal compliance, and the adoption of environmentally sustainable business practices. It also strengthens the capacity of F-SMEs to raise formal capital and mobilize financial resources, improve their value-added processes, ensure quality control, and integrate considerations for gender equality and social inclusion (GESI) and environment and climate change (ECC) into their processes.

Women-owned businesses in Tanzania often face challenges in accessing formal financing, with only 13 percent of them being able to secure formal credit, according to the 2016 MSMEs survey baseline report by FSD Tanzania. Formal financial institutions tend to view these businesses as risky, especially in the agriculture and agribusiness sectors. To bridge this gap, MEDA brought together F-SMEs and financial service providers (FSPs) that support the agriculture industry to discuss the obstacles and opportunities in obtaining financing. The goal of the event was to encourage knowledge exchange and establish potential collaborations and investment prospects. Moreover, the forum included personalized sessions between F-SMEs and FSPs to improve the understanding of the specific financial needs of women in agriculture.

Thanks to these partnerships, more than 11 F-SMEs, including Esther’s enterprise, have successfully accessed various forms of financial services and products. Esther was able to access a working capital loan of 30 million Tanzanian shillings (TZS) (15,990.85 Canadian dollars) from the Cooperative Rural Development Bank’s iMBEJU Program – a financial product specifically designed to empower women and youth-owned businesses.

Alongside this support, F-SMEs have obtained other financial products and services such as bank accounts, machinery loans, and digital finance solutions. These include Songesha, a facility for customers to easily top-up their existing finances to complete transactions, and Timiza VICCOBA, a mobile application offering savings and credit solutions that are advanced to customers at competitive interest rates.

Women entrepreneurs engage with financial service providers at a forum to foster financial service linkages.

Innovations for green and inclusive financing

Additionally, to boost inclusive green financing for F-SMEs, the project implemented a one-to-one matching grant. This incentive provides price discounts to women small entrepreneurs (F-SEs) who are seeking green technology and farm equipment to increase productivity.

As a result, 2,500 F-SEs have benefited from acquiring farming tools, high-quality seeds, irrigation systems, bee hives, and other farming technologies. Feedback from F-SEs shows that these initiatives have made a significant impact on their standing within the community, boosted their confidence, and lightened their workloads.

Women’s labour-intensive farm work restricted their chances of gaining additional sources of income or pursuing education. However, thanks to the availability of inputs, they now possess the ability to make well-informed choices regarding production resources in their communities. Today, they enjoy the freedom to decide which crops to cultivate, when to do so, and how to effectively manage their farms. This level of independence and authority over agricultural activities has not only enhanced their financial standing but has also raised their sense of self-assurance and self-worth.

The FEGGE project not only supports F-SMEs and women entrepreneurs to access formal financing but also collaborates with small entrepreneurs through Village Savings and Loan Associations (VSLA) group alliances to empower rural women in securing their financial futures. Through training sessions on saving, borrowing, and investing, these women are equipped with financing to increase their incomes and improve their livelihoods.

The project focused on formalization and setting up the governance structures of two VSLA group alliances and equipping them with the necessary knowledge on saving, borrowing, farm mechanization, and digital literacy, among other skills required for women to succeed in the male-dominated agricultural sector. With enhanced financial and digital literacy skills, these women can establish a dedicated support system within their communities, passing on their knowledge to empower others. Furthermore, through collaboration and resource pooling, women can overcome obstacles and emerge as leaders in their communities to build sustainable businesses, thereby enhancing their economic well-being.

Women entrepreneurs receive essential safety gear as part of the SMART incentives subsidies grant.

Closing the gender gap in agriculture

Through the business development services provided by MEDA under the FEGGE project, Esther has enhanced her skills and expanded her operations. Today, her business is thriving. She has formalized operations by obtaining a business registration name certificate, implemented sound financial management systems, and maintained proper financial records in preparation for investment opportunities.

As a testament to this growth, Esther expanded her team by hiring an accountant and is now able to meet her household needs, including paying her children’s school fees.

Esther’s success shows the positive impact that support and opportunities can have on women-owned businesses in challenging environments. With continued assistance and empowerment, more women entrepreneurs in Tanzania’s dryland regions can overcome obstacles and achieve success.

The economic participation of women like Esther in the arid regions of Tanzania not only promotes gender equality but also improves household well-being, strengthens community resilience, and boosts sustainable development. The 17th Tanzania Economic Update Empowering Women: from Expanding Access to Assets and Economic Opportunities, for example, shows that bridging the gender gap in agricultural productivity in Tanzania could lift approximately 80,000 citizens out of poverty every year while increasing annual agricultural output by 2.7 percent and boosting annual gross domestic product growth by 0.86 percent. Women’s empowerment is particularly crucial in challenging environments like Tanzania’s Dry Corridor and MEDA therefore remains dedicated to creating lasting impact in this space.

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