The government is preparing sweeping legal and policy reforms to ease access to credit for young entrepreneurs, including allowing movable assets to be used as loan collateral and strengthening the country's credit guarantee system.
Prime Minister Dr Mwigulu Nchemba announced the reforms on Sunday while representing President Samia Suluhu Hassan at the grand finale of the Vijana Uchumi Challenge 2026 and award ceremony at the Julius Nyerere International Convention Centre (JNICC) in Dar es Salaam.
The planned reforms seek to tackle one of the most persistent obstacles facing young entrepreneurs the inability to secure loans because they lack conventional collateral such as land or buildings.
"Many young people have viable business ideas, but they are unable to obtain financing because they do not possess assets that financial institutions traditionally accept as collateral," Dr Nchemba said.
He revealed that the Bank of Tanzania (BoT) is upgrading its existing credit guarantee facility into a specialised national institution that will coordinate loan guarantee services for businesses of all sizes.
According to the Prime Minister, more than Sh280 billion has already been committed to the initiative, while development partners have expressed interest in contributing over $150 million, significantly expanding the resources available to support businesses seeking credit.
"The enhanced guarantee scheme will reduce lending risks and make it easier for small, medium and large enterprises to access financing," he said.
In a move expected to reshape Tanzania's lending landscape, Dr Nchemba said the government will soon table legislation in Parliament to permit the use of movable assets as collateral, widening access to finance for entrepreneurs who do not own land or other fixed property.
"We want to legalise the use of movable collateral. A farmer or livestock keeper, for example, should be able to use warehouse receipts to obtain financing for farm inputs instead of waiting until produce has been sold," he said.
Economists have long argued that expanding acceptable forms of collateral could unlock billions of shillings in productive lending by enabling banks to finance businesses based on productive assets rather than immovable property alone.
Dr Nchemba said the reforms complement broader government efforts to improve the business environment, including legal changes that now allow Tanzanian companies to serve as lead contractors on major public projects a role previously dominated by foreign firms.
He said the reforms are intended to expand opportunities for local enterprises while stimulating entrepreneurship, employment and private sector growth.
Minister of State in the President's Office responsible for Youth Development, Dr Joel Nanauka, said the government remains committed to connecting young innovators with financing, mentorship and professional networks needed to transform ideas into successful businesses.
"Our office recognises that young people possess enormous creativity and innovation. What they often need is access to opportunities, guidance, information and financial support to grow those ideas into sustainable enterprises," he said.
Dr Nanauka said this year's Vijana Uchumi Challenge attracted 7,862 business ideas from Mainland Tanzania and Zanzibar.
After a rigorous selection process, 100 participants underwent entrepreneurship training before the competition was narrowed to 30, then 10 finalists, and finally three winners.
Jofrey Sanga won the overall competition and received Sh50 million, while Jacob Lugwisha claimed second place with Sh30 million. Robert Malonga finished third, taking home Sh20 million.
The competition forms part of the government's wider strategy to nurture youth-led enterprises, encourage innovation and strengthen the role of entrepreneurship in driving Tanzania's long-term economic growth.
