Sahara Ventures
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Sahara Ventures

Improving The Quality of Fintech Startups in Tanzania

The article gives insights on Pesatech Accelerator highlighting the Business health check of the fintech companies enrolled in the program

Innovation is the key ingredient to scaling fintech businesses

Innovation is a driving force and lifeblood of every startup, considering how it affects every other aspect of their businesses. For some startup founders, however, coming up with the initial idea for the solution and improvising it to fix or update features is the most they do for innovation. As long as consumer needs evolve, products will also evolve, and it is rational for any business to keep up with these changes. However, adopting an innovative culture within an organization is more than having an evolving product. It involves creating a mission-driven team, striving for continuous improvement, and developing research and development capabilities to ensure the business stays relevant and adapts to changes as soon as they happen. In figure 3 below, we have modeled how innovation interacts with other aspects of the business.

Startups are focused on driving traction, but no projections to guide growth

Issues around numbers were also notable, with some startups struggling to articulate market size or profit margin projections. Some founders focus more on product functionalities, whereas those with fully-developed products are more inclined towards growing users and revenues. There is nothing inherently wrong with either of the two pursuits, but without proper milestones or benchmarks to steer these undertakings, startups are likely to miss the mark. While every startup interviewed would strongly contend that there is traction for their offerings, only a handful had proper market sizing to visualize their share of the pie and articulate tactics they have in place to secure the same. Likewise, not many startups have financial models handy to demonstrate the viability of their business models, an aspect most financiers would be curious about.

Basic policies will serve as the guardrails to guide optimal performance

To have innovation and financial frameworks that work, startups will require effective policies to govern their commitments. While founders are often overwhelmed with competing priorities, hindering the implementation of tasks that do not reveal immediate and tangible outcomes, having basic policies to govern day-to-day actions will ensure businesses scale on solid foundations. For example, most startups lack a basic HR policy, a vital tool to underpin and promote the company culture and produce desired outcomes. Likewise, some startups have basic policies but lack measures to ensure proper execution, affecting accountability towards set standards.



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Sahara Ventures

Our mission is to build a stable innovation, technology and entrepreneurship ecosystem in Africa through consultancy and investment.