Tanzanian woman entrepreneur strides across a landscape of financial charts.

Breaking Barriers: How Tanzanian Women Entrepreneurs Are Redefining Access to Finance

Avery Sinclair in Business & Economy August 2025 • 4 min read.

"Discover the untold stories of Tanzanian women entrepreneurs and how they are overcoming institutional challenges to access the funding they need to thrive."

In Tanzania, a country brimming with entrepreneurial spirit, women are increasingly stepping up to start and lead businesses. These women-owned enterprises (WOEs) represent a significant portion of the nation’s economic activity, holding immense potential for further growth and development. But, the path to success isn't without obstacles. Accessing adequate finance remains a critical challenge, often hindered by institutional barriers and perceptions that limit opportunities for female entrepreneurs.

Traditional financial systems and institutions often pose unique difficulties for women in emerging economies like Tanzania. Factors such as high collateral requirements, stringent loan terms, and even gender bias can create significant roadblocks. While these challenges are daunting, they are not insurmountable. Tanzanian women entrepreneurs are finding innovative ways to navigate the financial landscape, leveraging informal networks, and redefining what it means to access finance.

This article explores the experiences of Tanzanian women entrepreneurs in accessing finance, highlighting the specific hurdles they face and the strategies they employ to overcome them. By understanding these challenges and celebrating the resilience of these women, we can gain valuable insights into fostering a more inclusive and supportive financial environment for entrepreneurs in Tanzania and beyond.

Decoding the Financial Landscape: Understanding the Hurdles for Tanzanian Women

Tanzanian woman entrepreneur strides across a landscape of financial charts.

For many Tanzanian women entrepreneurs, the journey to secure funding begins with navigating a complex web of institutional and societal barriers. Traditional lending practices often require substantial collateral, which many women may not possess due to cultural norms surrounding property ownership. High interest rates and the need for personal guarantees further compound the problem, making formal loans unattractive or inaccessible. But what other factors are in play?

Researchers Vanessa Naegels, Neema Mori, and Bert D’Espallier delve into these issues in their study, “An Institutional View on Access to Finance by Tanzanian Women-Owned Enterprises.” Their findings reveal that perceptions of gendered cognitive and normative institutions significantly impact whether a female entrepreneur even applies for a formal loan. These perceptions include:

Unattractive Loan Terms: High collateral requirements, interest rates, and personal guarantee requirements make formal loans unappealing.
Perceived Difficulty: The belief that accessing finance is more problematic for women discourages them from applying.
Lack of Financial Knowledge: Many female entrepreneurs feel they lack sufficient financial knowledge, preventing them from seeking formal loans.

Beyond these perceptions, the study highlights that the low utilization of formal loans by female entrepreneurs is primarily demand-driven. This challenges the effectiveness of policies focused solely on increasing the supply of formal loans without addressing the underlying perceptions and barriers that prevent women from seeking them out. So, if simply increasing supply will not fix the problem, what will?

Empowering the Future: Strategies for a More Inclusive Financial Ecosystem

The experiences of Tanzanian women entrepreneurs offer valuable lessons for policymakers, financial institutions, and support organizations. By addressing the underlying perceptions and barriers that prevent women from accessing finance, we can create a more inclusive and supportive financial ecosystem. It’s about fostering an environment where women entrepreneurs feel empowered to seek funding, confident in their ability to succeed, and equipped with the knowledge and resources they need to thrive. The path forward requires collaborative efforts, innovative solutions, and a commitment to breaking down the barriers that hold women back from reaching their full potential.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

This article is based on research published under:

DOI-LINK: 10.1080/13691066.2017.1358927, Alternate LINK

Title: An Institutional View On Access To Finance By Tanzanian Women-Owned Enterprises

Subject: Finance

Journal: Venture Capital

Publisher: Informa UK Limited

Authors: Vanessa Naegels, Neema Mori, Bert D’Espallier

Published: 2017-08-23

Everything You Need To Know

What are some key challenges Tanzanian women entrepreneurs face when trying to access finance for their businesses?

Tanzanian women entrepreneurs encounter several obstacles in securing finance, including high collateral requirements imposed by traditional lending practices, stringent loan terms that may be unattractive, and gender bias within financial institutions. Many women also perceive difficulties in accessing finance, and a lack of financial knowledge further discourages them from seeking formal loans. Overcoming these hurdles requires innovative strategies and a supportive financial ecosystem.

How do perceptions about women entrepreneurs affect their ability to obtain formal loans in Tanzania?

Perceptions significantly impact Tanzanian women entrepreneurs' access to formal loans. The belief that accessing finance is more problematic for women can discourage them from even applying. Researchers Vanessa Naegels, Neema Mori, and Bert D’Espallier highlight that perceptions of gendered cognitive and normative institutions significantly impact whether a female entrepreneur even applies for a formal loan, making it a demand-driven issue rather than solely a supply problem. This affects their willingness to engage with formal financial systems.

According to the research mentioned, is the low utilization of formal loans by women entrepreneurs in Tanzania due to a lack of loan availability?

The research by Vanessa Naegels, Neema Mori, and Bert D’Espallier indicates that the low utilization of formal loans by Tanzanian women entrepreneurs is primarily demand-driven. This suggests that simply increasing the supply of formal loans may not solve the problem. The underlying perceptions and barriers, such as unattractive loan terms and perceived difficulty in accessing finance, need to be addressed to encourage more women to seek formal loans.

What strategies can be implemented to create a more inclusive financial ecosystem for Tanzanian women entrepreneurs?

Creating a more inclusive financial ecosystem involves addressing underlying perceptions and barriers that prevent women from accessing finance. This includes fostering an environment where women entrepreneurs feel empowered to seek funding, confident in their ability to succeed, and equipped with the necessary financial knowledge and resources. Collaborative efforts, innovative financial solutions, and a commitment to breaking down institutional and societal barriers are essential for enabling women to reach their full potential.

What are the implications if financial institutions do not address the specific challenges faced by women entrepreneurs in Tanzania, and only focus on increasing the supply of loans?

If financial institutions only focus on increasing the supply of loans without addressing the specific challenges faced by Tanzanian women entrepreneurs, the impact may be limited. The research by Vanessa Naegels, Neema Mori, and Bert D’Espallier highlights that the low utilization of formal loans is primarily demand-driven, influenced by perceptions, unattractive loan terms, and a lack of financial knowledge. Ignoring these factors could result in continued underutilization of available funds by women entrepreneurs, hindering their growth and the overall economic development of their communities. A more holistic approach is needed to foster a supportive financial environment.