Tanzania is home to small and nascent fintech sector that comprised just a little over 30 companies in 2021, data from a study conducted by the United Nations Capital Development Fund (UNCDF) show. But despite its relatively small size, the sector is growing at a fast pace and gaining prominence, driven by rapid adoption of mobile money, technological advancements and government support.
Between 2014 and 2021, mobile money account ownership in Tanzania increased from 32% of the adult population to 45%, highlighting the rapid uptake of mobile money, data from the UNCDF reveal. This growth has prompted mobile money providers to expand their offerings beyond basic transactions to include savings, loans, bill payments, and integration with banking services.
At the same, growing demand for digital financial services has attracted new tech startups to enter the market, aiming to address gaps left by traditional financial institutions and digital service providers. These companies are leveraging mobile technology, data analytics, and artificial intelligence (AI) to provide convenient and accessible solutions to the unbanked and underbanked segments of the population.
Simultaneously, the Tanzanian government has committed to supporting the digital and fintech sectors through policies and initiatives. The most recent National Five-Year Development Plan, the 2020 establishment of a new Ministry for Information, Communications, and Technology, and initiatives led by the Tanzania Commission for Science and Technology, all underscore this commitment.
Likewise, the Financial Sector Development Master Plan, the forthcoming fintech regulatory sandbox, and the 2023 launch of the third National Financial Inclusion Framework, reflect the government’s efforts to ensure that the regulatory frameworks governing the financial sector evolve with the pace of innovation.
With fintech continuing to grow and evolve in Tanzania, we look today at some of the sector’s biggest and fastest-growing ventures. For this list, we focus on private and independent fintech companies, delving into their product offerings, recent achievements and growth strategies.
Nala
Money transfer startup Nala aims to revolutionize the traditional remittance landscape, where a significant portion of transactions still occurs offline or in physical cash. By leveraging cutting-edge technology and collaborating closely with local communities, Nala streamlines payments, making them more accessible and cost-effective.
Nala provides an app that allows users from the UK, the US and the European Union (EU) to securely and swiftly send payments to various African countries, including Kenya, Uganda, Tanzania, Ghana, Rwanda, Nigeria, Senegal, Côte d’Ivoire, and Cameroon, in a matter of seconds.
The startup has emerged as a significant player in the African remittance market, garnering attention for its strong growth and strategic expansions. In 2023, it made significant strides by venturing into the European market, allowing remittances from 19 European countries to African countries.
The expansion followed numerous additional enhancements to Nala’s product, including the incorporation of ApplePay and Google Pay into its offerings to allow payments from the US and the UK to Africa.
Nala raised US$10 million in a seed round in 2022. The round came almost three years after the startup secured a seven-figure pre-seed round led by Accel.
Currently, the company is developing a proprietary payment platform called Rafiki. The platform will not only power Nala’s consumer fintech app, it will also be accessible to global companies looking to make payments into and out of Africa, allowing Nala to venture into payments processing for businesses.
The company’s growth plans come against the backdrop of Nala’s revenue growth, which is said to have grown ten times in the last 12 months.
Tembo
Tembo provides a suite of application programming interfaces (APIs) and software development kits (SDKs) for businesses to embed and launch payments, collections, cards, wallets and programable bank accounts across Africa.
The company also operates Temboplus, an app that allows users to achieve their savings goals. On Temboplus, users can create and manage multiple savings goals, effortlessly contribute funds via diverse payment methods, receive timely reminders to stay on track, and invest in money market funds to augment their savings with potential for higher returns.
Tembo holds a payment service provider license from the Bank of Tanzania, along with additional regulatory approvals to operate in Tanzania, Rwanda, and other countries. The company is actively expanding its footprint in the East African region and plans to extend its services to West African countries in the near future.
Last year, Joe Kinvi, a founding partner of investment club HoaQ, named Tembo as a must-watch startup in Africa. According to data from Dealroom, Tembo has not secured any equity funding yet.
Ramani
Ramani is a software platform designed to enhance sales visibility and facilitate access to financial services for resellers. Founded in 2019, the company addresses the challenges stemming from fragmented supply chains and limited data transparency.
At the core of Ramani’s solution is its cloud-based ecosystem, which integrates brands, micro-distribution centers (MDCs), and merchants through sophisticated supply chain management software. The platform encompasses a POS application tailored for MDCs, complemented by a web dashboard providing comprehensive sales insights and inventory visibility. By digitizing key processes such as inventory management, procurement, and sales tracking, Ramani allows businesses to optimize operations and unlock new avenues for growth.
In addition to improving transparency in supply chains, Ramani extends financial services to resellers through its Ramani Finance arm, providing access to credit facilities for inventory procurement. The company’s lending license from the Bank of Tanzania underscores its commitment to supporting resellers and enhancing financial inclusion within the supply chain ecosystem.
In November 2022, Ramani achieved a significant milestone by closing a US$32 million Series A debt-equity round to scale its network of MDCs and launch a new micro-credit offering for select MDCs. This came a year after the closing of an undisclosed seed funding round led by Flexcap Ventures and entrepreneur, Jared Schreiber.
Ramani, which acquired a lending license from the Bank of Tanzania in 2022, is active in five cities in Tanzania, and in Nairobi, with operations spanning across East Africa.
Swahilies
Swahilies is an emerging player in the Tanzanian digital payment landscape. The startup develops innovative payment solutions tailored for businesses across the continent, and strives to streamline payment processes and foster financial inclusion.
Swahilies provides a versatile platform that empowers businesses of all sizes to seamlessly accept digital payments from diverse sources, including mobile money and card payments. Through its mobile applications, websites, and APIs, the startup equips businesses with the tools they need to integrate digital payments effortlessly into their operations. This seamless integration enables companies to receive payments swiftly and securely, eliminating the complexities associated with traditional payment methods.
Additionally, the Swahilies platform provides small and medium-sized enterprises (SMEs) with business management tools as well as access to a range of financial services, including credits and banking services.
In 2022, Swahilies secured a pre-seed funding round of US$50,000 from The Baobab Network, an accelerator dedicated to supporting early-stage technology startups in Africa. This funding injection provided Swahilies with the resources and support needed to scale its operations, accelerate product development, and fuel its expansion into new markets across the continent.
Swahilies currently serves more than 10,000 SMEs in Tanzania. The company is now focusing on growing its use case and build a strong foundation in its home country before expanding to other African markets.
Featured image credit: edited from freepik
