Access to funds hampers growth of nutrition-sensitive businesses -govt

29Mar 2021
By Guardian Reporter
The Guardian
Access to funds hampers growth of nutrition-sensitive businesses -govt

​​​​​​​ONE of the key players in the Morogoro agribusiness value chain is Sokoine University Graduate Entrepreneurs incubator (SUGECO), established in 2011 to promote youth engagement in agriculture and to support nutrition-sensitive businesses in the region.

The incubator works strategically with the reputed university of agriculture to nurture the agribusiness ecosystem in the region, with credits to supporting companies such as Sanavita and Kinshaga Food Products which have also been part of the Lishe Accelerator, a program implemented by Sahara Ventures and Global Alliance for Improved Nutrition (GAIN) Tanzania.

SUGECO also works as the center for product development and technology transfer, offering business development services for SMEs, and advisor to private and public agencies on issues related to nutrition and agribusiness.

A recent report by Sahara Ventures and GAIN Alliance Tanzania on the state of nutrition-sensitive small and medium enterprises in the country has established that the region’s ecosystem is growing, compliments to the role played by Sokoine University of Agriculture (SUA) and SUGECO.

The report, however, notes that there are still many challenges that need to be addressed, most notably being lack of access to high quality and attractive packaging materials, access to financing, machines to measure nutritional contents, and new markets for nutrition-sensitive products.

“The incubator play a crucial role in the region’s ecosystem, and it addresses serious issues such as malnutrition, ending post-harvest losses, ending hunger, and creating employment opportunities for youths through agribusiness,” said Jumanne Mtambalike, Sahara Ventures Chief Executive Officer (CEO), architects of the report.

It has also provided incentives to farmers to get involved in Orange-Fleshed Sweet Potato (OFSP) farming, also known as “Viazi Lishe, by creating a business value chain by linking farmers to local food vendors also known as “Mama Lishe” and Baba Lishe.

According to the report, the incubator which also works as a business incubator has been working with food vendors in Dumila, Kilosa Municipality, and has supported youth and women in the production, processing, and value addition of OFSP.

“The incubator has also been working with entrepreneurs helping them to learn to make healthy bread from OFSP instead of wheat. The incubator is helping the entrepreneurs by creating demands from local schools primary and secondary to adopt health OFSP bread instead of wheat bread,” Mtambalike said.

Some of the notable products that emerged from the incubator include; Akili Banana Biscuits from Kinshaga Food Products, Sanavita OFSP Flour from Sanavita, and SolarTunda Viazi Lishe Biscuits from SolarTunda.

“While at SUGECO some of the key issues we learned even though there is acceptance from the market for nutrition-sensitive products and the entrepreneurs are working hard to develop their businesses, there are a lot of obstacles keep entrepreneurs from building products that meet regional and global markets standards,” he added.

Founder of Kinshaga Food Products, Elia Kinshaga, shared his frustrations about building his business from the ground up and his experience engaging with financial institutions to access capital, saying that accessing loans from local banks is a back-breaking process.

“Local banks lack understanding and services packages for SMEs and treat SMEs like established businesses,” Kinshaga said.

The company was eventually able to secure funds and raise capital but unfortunately due to the outbreak of the Corona Virus, they faced delays in production because of the difficulties in receiving a machine they need for production which is stuck in China.

“Banks demand that small businesses continue paying interests even when these businesses are not operating,” Kinshaga lamented.

He also said that most agribusiness funds that are meant to de-risk SMEs while accessing loans are not designed to support the SMEs since their priority is the safety of their own funds.

“Guarantee fund managers need to rethink their models to ensure they really serve the purpose and address real problems supporting SMEs. Otherwise, the funds will just be helping the banks to maximize profit while benefiting everyone else except the intended businesses which are SMEs at early and growth stages,” he said.

Another entrepreneur in the agribusiness value chain, Rachel Kingu, is the founder of Jore TZ, which offers a range of nutrition-sensitive products sold in supermarkets in Dar es Salaam, Mwanza, Morogoro, and Dodoma regions.

Her experience in dealing with the local government authorities to access funding dedicated to youth and women groups has left her with a bad aftertaste.

She said that she was involved with a women’s group in which she served as a secretary and at one point the group sought funds from Mvomero local government authorities but was disappointed by the sheer lack of commitment by members of the group.

“The lack of commitment on the part of the women involved in the group made it a struggle to return the funds they received from the local government. Out of the ten women involved during the loan application process, only two remained to manage the original project,” she said bitterly.

Kingu has advised the government to rethink how it dishes out funds to youth and women with the focus being on supporting actual businesses instead of groups.

Global Alliance for Improved Nutrition (GAIN) Tanzania and Sahara Ventures have been collaborating to support nutrition-sensitive SMEs in the country to attain technical and investor readiness and contribute to the national economic development and nutrition agenda.

Nutrition-sensitive SMEs are more than just businesses that add value to agriculture; they also help people understand the need of consuming nutritional foods in order to address malnutrition

In 2015, more than 2.7 million Tanzanian children under 5 years were estimated to be stunted and more than 600,000 were suffering from acute malnutrition, of which 100,000 were severe cases, according to Unicef.

Ten regions account for 58 percent of all stunted children and five regions account for half of the children suffering from severe acute malnutrition in the country.

Given the importance of nutrition in the overall physical and cognitive development of children, there is a need to focus on the first 1,000 days of a child’s life to prevent the negative effects of malnutrition from becoming irreversible.

Unicef argues that investing in nutrition is essential for Tanzania to progress. It is estimated that the country will lose USD 20 billion by 2025 if the nutrition situation does not improve. In contrast, by investing in nutrition and improving the population’s nutritional status, the country could gain up to USD 4.7 billion by 2025.

As such supporting these businesses is vital for a myriad of reasons with benefits that spread wide and far.