Innovation for Social Change


Innovation for Social Change
Innovation for Social Change © IIH

Switzerland promotes growth of impact-first enterprises in Tanzania through the provision of tailored technical assistance and innovative impact-linked financing (ILF) instruments. Support to enterprises is tied to their potential or proven social impact, measured against the extent of improvements in social and economic well-being among poor youths and young women. Switzerland further promotes strategic policy dialogues, paving way for systemic support to impact-first enterprises. 

Country/region Topic Period Budget
Tanzania
Employment & economic development

Business support & economic inclusion
Tradepolicy & market system
Employment creation
Financial policy
SME development
Social dialogue
01.07.2020 - 31.08.2027
CHF  10’200’000
Background Small and Medium-sized Enterprises (SMEs) contribute roughly 40% of total employment and 35% of Tanzania’s GDP. Yet, SMEs still face many constraints including inadequate access to capital, regulatory framework, and human capital development. Consequently, Tanzania-based SMEs’ growth rate is often lower than the corresponding failure rate. Women-led SMEs are disproportionately affected, often facing more exclusion from property ownership and access to finance. Whereas the potential from youth engagement is overlooked and undersupported, despite their large population and unique capacity for innovation. Against the backdrop, the Innovation for Social Change programme seeks to support SMEs that prioritize social and economic wellbeing of youth and women – through their operations, products, and services. To achieve the above, capacity building and ILF will be deployed. The rationale behind the intervention strategy is to incentivize beneficiary SMEs to equally embed impact and financial returns as part of their business (growth) models. The Embassy of Switzerland in Tanzania can leverage Switzerland’s political pioneer role in innovative Impact-linked Financing and Private Sector Engagement (PSE) to make this programme a success.
Objectives The overall goal is to contribute to an ecosystem, in which thriving small and medium sized impact enterprises improve the living standards of Tanzanians, especially poor youth and young women, as customers, suppliers, or employees.
Target groups

Direct beneficiaries:

  • Enterprises that prioritize positive social and economic benefits, particularly among youth and women, as part of their business models.

Indirect but ultimate beneficiaries:

  • Low-income population (especially youth and women) as customers, suppliers, or employees.  
Medium-term outcomes
  1. Access to impact capital is increased in Tanzania as a result of the Catalytic Fund and others engaged in the ecosystem.
  2. More stakeholders, particularly poor youths and young women, benefit from gainful income-generating opportunities and sustainable livelihoods.
  3. Impact-first enterprises and impact investors enjoy holistic and systematic support thanks to improvements in acts and policies, timely and accurate communication, better stakeholder coordination, and effective service delivery.
Results

Expected results:  

  • 250 enterprises receive tailored support in impact identification, monitoring and management.
  • Implementing organizations, AlphaMundi (a Swiss-headquartered impact investment firm) and Small Enterprise Assistance Funds (SEAF) have the capacity to effectively deploy Swiss pioneered ILF tools, within and beyond the ISC programme.
  • 38 enterprises secure suitable financing to enhance social impact and grow their businesses.
  • Tanzania’s enterprise ecosystem is enriched with awareness on the Swiss pioneered ILF tools.
  • Tanzania’s enterprising ecosystem experiences quality and timely stakeholder dialogues, outreach events and strategic partnerships.
  • There is overall improvement in data availability on social impact to inform policy-making.


Directorate/federal office responsible SDC
Credit area Development cooperation
Project partners Contract partner
International or foreign NGO
Private sector
United Nations Organization (UNO)
  • Other international or foreign NGO North
  • Foreign private sector North
  • Foreign private sector South/East
  • United Nations Development Programme


Coordination with other projects and actors There are potential synergies with Aceli Africa project, which is funded by the Global Programme Food Security (GPFS). The ISC programme is also part of the “Heracles Project”, thereby contributing to SDC’s PSE guidance development. Additionally, a review for synergies with the ongoing support to Ifakara Innovation Hub will be conducted. 
Budget Current phase Swiss budget CHF    10’200’000 Swiss disbursement to date CHF    2’776’104
Project phases Phase 1 01.07.2020 - 31.08.2027   (Current phase)