Investing in Social Innovation and Technology in Tanzania

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Investing in Social Innovation and Technology in Tanzania • Investing in the ecosystemnetwork. Kilihub 14is home to many nationally wellknownand successful start-ups including MicroHealth Initiative 15 , Last Mile 16 , and AffordableComputers and Technology for Tanzania (ACCT) 17 . Itattracts investors from Nairobi and further afield andenjoys multiple income streams, a budget, board, andsome full-time employed staff. Other hubs, such asRLabs in Iringa, are more informal, community-drivenspaces that focus on upskilling local entrepreneursto come up with ideas to solve local communityproblems. This divergent focus makes sense – theenvironments the hubs operate in are vastly different,as are the local needs.A new generation of hubs set up to serve studentsand staff within universities is emerging, yet thesesuffer from a resource shortage and lack of linkagesto industry and the private sector. Our research withMawazo Challenge (see page 20) and outreach withTanzania’s Allied Health Universities has found thatwhile students have no shortage of ideas, many fallshort of developing those ideas into workable productsor services. Investors should support links betweenuniversity hubs, the private sector, government, andcivil society, and provide investment to build a pipelineof ideas and people needed to feed the ecosystem.1.2.2 Engage the private sector throughtargeted activities and incentivesSince HDIF's original design, a recurring theme hasbeen how to better engage with Tanzania's privatesector which has a major role to play in changingthe way social services are delivered. Less risk-aversethan the public sector, non-state actors have theliberty to generate and test new ideas, and marketdrivenincentives to scale up approaches that deliverwhen commercial viability is proven. Private sectorengagement for innovation comes in all mannerof shapes and sizes. While some private sectorplayers may prefer to provide support throughdirect financial investment, others will be seeking theopportunity to support skills and entrepreneurshipthrough their corporate social responsibility (CSR)programmes.HDIF has attempted to engage with the private sector– in different ways and with different segments of it –with varying degrees of success. HDIF grantees havedemonstrated that the key to unlocking private sectorsupport is in identifying areas for shared interest andfinding new ways of doing business that combinethe opportunity to create social impact whilst stillfocusing on the ‘bottom line’.Innovation canbe defined simplyas a ‘new idea,device or method’.Innovation can alsobe viewed as theapplication of bettersolutions that meetnew requirements,unarticulatedneeds, or existingmarket needs.Innovation can takeplace through theprovision of moreeffective products,processes, services,technologies, orbusiness modelsthat are madeavailable to markets,governments,and society. HDIFuses Doblin’s TenTypes of Innovation(www.doblin.com/ten-types).Both Buni and Dar Teknohama Business Incubator (DTBi) 18were establishedin COSTECH in 2011, at a time when there weren’t many hubs or incubators in Tanzaniaand there was a need for that type of support. Today the ecosystem has grown, and therole of government has changed. I would like to see COSTECH have a coordinatingrole, supporting the hubs and incubators nationally andmaking sure there are hubs around Tanzania so thatall entrepreneurs can find support closer to home.From the entrepreneur point of view, COSTECHshould be able, among other things, to help withfinding support, being able to direct entrepreneursto hubs close to them, and also providinginformation about funding opportunities. We are juststarting on that path, supporting universities toopen innovation spaces and next we’ll workwith districts. It might take some years but weare getting there.DR AMOS NUNGU,DIRECTOR GENERAL OF COSTECHCOSTECH14https://www.kilihub.com/15http://www.microhealthinitiative.org/16http://lastmilehealth.org/17http://www.actt.co.tz/18http://teknohama.or.tz/14
Investing in Social Innovation and Technology in Tanzania • Investing in the ecosystemAffordable financing for the private health sectorDespite the presence of more than 8,000 accredited drug dispensing outlets (ADDOs) and 1,333 private health facilitiesacross Tanzania, credit to the private health sector is estimated to be less than 1 per cent of the total loan portfolio ofregulated banks and financial institutions. Yet these private health facilities are an important part of Tanzania’s healthsystem, providing frontline health-care in many rural areas. In 2015, the Association of Private Health Facilities in Tanzania(APHFTA) secured grant capital and operating funds from HDIF to trial Afya Microfinance (AmiF), a novel microlendingproduct that aims to improve access to affordable financing in the private health care sector. Group loans were offeredto private health facilities, and as a result, these facilities are now able to provide higher-quality care, and are reapingfinancial benefits for the business owners: 98 per cent of ADDO owners in one region confirmed they have experiencedeconomic benefits at both individual and family level. As a result of developing the product into an attractive financialproposition, APHFTA secured further investment from the Small Entrepreneurs Loan Facility (SELF) by way of debt financeand a grant from Comic Relief to continue the initiative beyond the HDIF grant. The investments have enabled AmiF toopen a new branch in the Geita region and expand its operations to other regions of the Lake Zone.The potential ofcorporate socialresponsibility investmentIn recent years, some of the large telecomscompanies have started to invest in CSRprogrammes by homing in on the youthdemographic – their main customer base –and building social entrepreneurship skillslargely through the development of digital andanalogue programmes hosted on their ownplatforms. For example, Airtel’s Fursa programmeis enabling young entrepreneurs by providingtools and training whilst Tigo’s collaborationwith DTBi funds an incubator programmeaimed at promoting local talent and generatingemployment in the country through ICT.capacity building, and focus on more developedsector clusters or value chains where there is agroundswell of support. This creates lessons on whatworks and what does not that can be shared so thatothers can replicate and adapt successes elsewhere.HDIF is a broad programme encompassing threedevelopment areas with interests in technologyapplications, skills, and job growth among other crosscuttingissues. When the programme first started,the resources needed to directly influence specificpolicies, advocacy, or behaviour change in each ofthese contexts were not available. HDIF identified thatthe most effective and impactful use of its resourceswas to create quick wins by focusing resources ongenerating learnings and raising the profile of existingclusters – within and outside of HDIF’s portfolio – thatothers could learn from, adapt, and replicate, and indoing so influence systemic change.A socialentrepreneuris a person whoestablishes anenterprise withthe aim of solvingsocial problemsor effecting socialchange.An investmentis any form offinancial supportto an individualor organisation,whether in the formof a grant, loan,equity, or otherwise.1.2.3 Create early success stories that canbe replicated and scaled in the long termby investing in networks where willing andcapable partners already existCatalysing innovations in any ecosystem requires awhole range of support for the innovation to takeroot and for the systems to be in place for it to thriveand scale. During the early stages of an ecosystem,many of the systems, networks, and structures maystill be in their infancy, which can create barriers toscale and systematic change. In designing innovationprogrammes for early-stage ecosystems, investorsshould provide targeted funding with skills andShule Directis partneringwith thetelecommunicationcompany Tigo todeliver MakiniSMS, a mobilelearning platform.SHULE DIRECT15
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Investing in Social Innovation and Technology in Tanzania

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