CFAs: Unlocking Startup Financing through Strategic Partnerships (Tanzania)

The FUNGUO Innovation programme is committed to advancing Sustainable Development Goals (SDGs) in Tanzania through an integrated approach aimed at nurturing impact-driven startups and innovative Micro, Small, and Medium Enterprises (MSMEs). By strategically addressing obstacles within the innovation ecosystem, FUNGUO seeks to create an empowering environment for innovators and entrepreneurs. The program’s theory of impact posits that supporting and scaling startups and innovative MSMEs will not only generate jobs, particularly for women and youth, but also enhance income, leading to quality livelihoods and fostering sustainable and inclusive development.

Co-funded by the European Union (through the BEGIN Programme), the British Government (through the Africa Technology and Innovation Partnerships, ATIP) and UNDP, FUNGUO is implemented by UNDP Tanzania in collaboration with the United Nations Capital Development Fund (UNCDF). This collaborative and multi-stakeholder approach ensures a comprehensive and impactful intervention in Tanzania’s innovation ecosystem. Working closely with the Tanzanian Commission of Science and Technology (COSTECH) and other government agencies, FUNGUO aims to make a significant contribution to the country’s sustainable development goals by fostering a supportive environment for startups and innovative MSMEs.

iMBEJU, a key initiative of the CRDB Bank Foundation, is a sustainability funding program aimed at revitalizing entrepreneurship in Tanzania. Through revolving soft loans, IMBEJU supports scalable business ideas with significant societal impact. The initiative also provides youth, women entrepreneurs, and special groups with essential tools, including financial literacy, entrepreneurship skills, and business management training.

Funding Information

• Applicants then stand a chance to raise funds through FUNGUO’s catalytic grants (TZS 50 million to TZS 100 million) or IMBEJU’s soft loan facility (TZS 30 million and above depending on business capacity and ability to repay the facility).
• Up to 20 applications may be awarded the FUNGUO Catalytic grant, depending on the requested amounts. The same successful applicants have an option to access the soft-loan facility from iMBEJU. At least 40% of the FUNGUO available funding has been earmarked for women-founded or women-led businesses.

Eligibility Criteria

• This call for funding application is open to ventures that do no harm to people and environment and meet the following basic criteria:
• For-profit entities or market-oriented social enterprises, that can be characterised as “startups”.
• Legally registered in Tanzania (incorporated or with a business name registration).
• Majority-owned by Tanzanian citizens (by 51% and above)
• Beyond ideation and pilot stage, with a minimum viable product that has some market traction (post revenue).
• Have not raised more than $100,000 in funding (in Equity or debt) to date.

Evaluation Criteria

• Innovation
  • The eligible applicants must demonstrate how innovative they are in terms of products or services they offer, processes, additionality, unique selling proposition, or unique experience they create for their clientele, etc. as compared to the competition.
• Business Viability and Potential to Scale
  • Eligible applicants must demonstrate their potential to generate enough revenue and profits to sustain themselves in the short to medium term. They must also demonstrate their potential to scale through the ability to grow and expand their operations and offerings in the long term.
• Team and Management
  • The applicant has the necessary expertise, as well as management capacity and human resources, to substantially scale its business. Additionally, the team must demonstrate a clear understanding of how their target market operates, with team members who have first-hand experience of the problem or possess deep understanding of their target customers’ challenges.
• Development Impact
  • The business does not do any harm to people or the environment.
  • The business model has a significant developmental relevance.
  • The impact is measurable, i.e., positive effects on the target groups.
  • The venture is contributing to reaching the SDGs by increasing local income, saving natural resources, improving access to resources and services, and creating decent jobs.

For more information, visit FUNGUO.