Supporting Nutrition-Sensitive SMEs from ground-up lessons from Small Industries Development Organization (SIDO), A case of SIDO Dodoma, Tanzania
This article is a recap of the study visit carried by Sahara Ventures and GAIN Tanzania with the aim to study and understand the pipeline of support for nutrition-sensitive businesses in Tanzania. This is the second article about this project in a series of articles. You can access the first article here.
Most of the sub-national innovation and entrepreneurship ecosystems in Tanzania are still at the nascent stage. Cities like Arusha, Iringa, Mbeya, and Dodoma showing signs of growth. Dodoma, the capital city of Tanzania is home to hubs such as Capital Space, an innovation hub that promotes innovation, technology, and entrepreneurship for Dodoma youths. The University of Dodoma is the hotspot for future techs such as Artificial Intelligence mostly pioneered by pro-active students and staff who sees the potential of the technology in different sectors. Startups such as Belltro and PallotAI can emerge from the university.
SIDO plays a slightly different role but is an important member of the ecosystem. The primary beneficiaries of SIDO are traditional “makers” and SMEs. The organization offers a range of services to entrepreneurs and makers. Some of the services include shared workspace, technology, and machinery, an incubator, and training programs. Important to note SIDO was among the earliest organizations to adopt the concept of Business Incubation to support and nurture the growth of small industries. SIDO also offers soft loans to promising SMEs and youth groups. SIDO Dodoma's priority focus is on two main sectors; Leather Processing and Valued Addition, and Food Processing.
Zooming In The Role of SIDO In Supporting Nutrition-Sensitive SMEs
From the ecosystem mapping framework, SIDO as an organization plays a different role. Each role is extremely important in nurturing the growth of SMEs in the sector. The three most important roles played by SIDO in the framework are Nutrition-Sensitive SMEs Enabler, Financier, Regulator, and Ecosystem Anchor.
Enabler Role
Enabling role is possibly the largest and the most important role of SIDO in supporting nutrition-sensitive businesses. SIDO helps entrepreneurs to establish and formalize their businesses. The organization also offers shared office spaces for SMEs. In Dodoma, SIDO has 6 manufacturing facilities designed to host SMEs. One of the beneficiaries of the shades is Home Mate, an SME involved in the value addition of different farm products. The company uses the facility for production. Currently, they can produce up to 3 tones per day. SIDO also offers skills acceleration training for entrepreneurs including SMEs working in the nutrition sector to ensure they follow standards and maintain quality. SIDO also an incubation facility for entrepreneurs. Access to machines and technology for processing and small-scale production for nutrition-sensitive SMEs is extremely important. SIDO plays an important role in producing some of these machines and also training entrepreneurs on how to use them.
Financier Role
SIDO offers a range of financing solutions to youths and entrepreneurs that meets the requirements. Some of the funds include; National Entrepreneurship Development Fund (NEDF) — the fund established by the government in 1994 under SIDO to finance and support all small entrepreneurial development activities, and Regional Revolving Fund (RFF). Both these funds have the potential to benefit nutrition-sensitive businesses in Tanzania at the piloting and growth phase. Other funding includes the existing Credit Guarantee Schemes and the SANVIN fund. The SAVIN fund is a joint funding program established by partners including SIDO, Azania, VETA, NSSF, and NEEC.
Regulator Role
Even though SIDO has no regulating mandate, the organization ensures SMEs that go through its programs; incubator, financing, training, etc comply and follow standards and procedures set by regulators such as Tanzania Burea of Standards (TBS) and others. The organization also helps SMEs to access different certifications and qualifications from other government bodies to start production and entering the market. Nutrition-Sensitive SMEs that have gone through the SIDO process and adopt SIDO shared working spaces have better chances to complete paperwork in a reasonable time compared to SMEs without the skills and connection to the organization.
Ecosystem Anchor
In Dodoma, SIDO plays a crucial role in linking different stakeholders to the ecosystem. In the case of SIDO Dodoma the organization work with the likes of VETA, NSSF, and NEEC from the public sector to support SMEs at different stages of their growth. The organization also works with regional and global partners to ensure technology transfer, experience, and resource sharing with partners from advanced markets. For example, SIDO works in the Credit Guarantee Scheme with JICA and CRDB. SIDO also works with Local Government Authorities, for example, they help youth and women beneficiaries of the LGA fund on building their businesses from
the ground-up.
Challenges Facing Nutrition-Sensitive SMEs Accessing SIDO Services
When we engaged with different early-stage entrepreneurs in the nutrition sector to reflect with them on why they are not accessing SIDO funds and other facilities to further grow their businesses. These are some of the issues that emerged.
Communication Channels
Even though there is a lot happening at SIDO very little is known to small-scale nutrition-sensitive SMEs owners. For a number of reasons; exposure, literacy, connections, and experience. There is a need to find a way to empower youths and women working in this sector to capitalize on the opportunities offered by the organization. SIDO also needs to rethink its strategy towards targeting youths.
Most youths access information via digital media platforms these days. There is a need to explore new ways to promote these opportunities to ensure they are fully capitalized. There is also a need for a strategic partnership between organizations supporting nutrition-sensitive businesses and SIDO to ensure amplified impact in the nutrition sector. Other entrepreneurs working at SIDO don’t understand the importance of producing nutrition-sensitive products that are highly needed by our market to address several health challenges facing our communities.
Smart Manufacturing and Technology Transfer
Some of the nutrition-sensitive SMEs need more advanced technologies e.g technologies to check and assess the nutrition contents to allow them scientifically to produce high nutritive products. There is a need to find a way to transfer some of the latest technologies adopted in the advanced market to our production facilities. The lack of some machines and tools hinders the opportunity for high-quality nutrition-sensitive products to be produced that can go beyond Tanzania and target regional or global markets.
Challenges With The Funds
SMEs founders felt the process to access the funds needs to be streamlined further and some of the cost related to applying for the funds needs to be reduced or removed completely. There was also an issue of challenges facing entrepreneurs who are given loans in groups. Lack of commitment and discipline of some of the group members makes it difficult for some businesses to flourish. They felt more emphasis should be given to individual entrepreneurs. There were also some complaints about the models of the guarantee funds. They felt the funds need to be reflected upon and revised to see if they really de-risk the entrepreneurs and incentivize banks to issues loans. One of them complaining what is the meaning of the funds if it only serves the purpose after the bank has taken everything from me.
All in all, SIDO plays a crucial role in supporting nutrition-sensitive SMEs and building a strong ecosystem at the sub-national level. There is still a need to further promote the work that is done by SIDO on the ground to youths who are the main beneficiaries. SIDO also needs to find a way to work and engage with regional and international organizations working in the nutrition-sensitive sector to ensure the SMEs follow regional and global standards. This will also help the SMEs access other services including access to investor-readiness programs and growth capital.
