Shinyanga Entrepreneurs Request 10% Loan Criteria Reconsideration

Small Entrepreneurs in Shinyanga Urge Government to Reevaluate 10% Loan Group Requirements
Friday, March 7, 2025

Shinyanga, Tanzania – Small entrepreneurs in Shinyanga have appealed to the government to revisit the requirements for accessing the 10% loan scheme provided by local councils. While the government aims to support small businesses through these loans, certain criteria are creating significant barriers for many potential beneficiaries.

One of the main challenges highlighted by business owners is the requirement for all group members to be from the same area. This rule has proven to be problematic as some entrepreneurs operate in regions with low business awareness, making it difficult to meet the repayment terms. In contrast, those in more business-savvy areas may face challenges due to the lack of support from their local peers, preventing the loans from being paid back effectively.

Evelyne Nnko, a spice processor based in Kahama Municipality, shared her experience with the loan scheme. Nnko, who started her business with a modest capital of Sh20,000 and has grown it to Sh500,000, expressed frustration over the group-based loan model. She believes that the rule requiring members to be from the same area has limited her ability to expand her business.

"I started with a dream of growing my business, but the rule that group members must be from the same area has hindered my progress. We may live in different areas but share a common goal and repayment capacity," Nnko explained. She added that the loan model should allow individuals to borrow independently if they can demonstrate the ability to repay on time.

Nnko has formalized her business by registering with the Business Registration and Licensing Agency (BRELA). She also added value to her products, using the income to educate her children and pay taxes. Despite these achievements, she found the 10% loan scheme difficult to navigate due to the location-based grouping rule, which she sees as a barrier to success for many.

Hilda Robert, the Loan Coordinator for Kahama Municipality, clarified the council’s stance. “The loan scheme is designed for groups of at least five members, all of whom must come from the same area. This helps our loan committees effectively monitor and assist the group. However, individuals with disabilities can apply alone,” Robert stated.

According to the 2022 Population and Housing Census, Shinyanga’s population stands at 2.24 million, with women constituting 50.79% of the population. For the 2024/25 fiscal year, the region has allocated Sh5.2 billion to support loans for women, youth, and people with disabilities. By February 2025, Sh2.3 billion had been distributed to 19 women’s groups, 110 youth groups, and 10 groups for people with disabilities.