Fintechs play a vital role in Tanzania’s financial ecosystem, bridging the gap between underserved populations and formal financial services.

Over the past decade, Tanzanian fintechs have transformed how low-income people and those living in remote communities access and use financial services. Fintech-enabled delivery models allow them to transfer money, access credit, save, and insure against risk through simple, mobile-first platforms. As mobile phone penetration and digital literacy rise, the fintech sector continues to offer a path toward national financial inclusion.

Tanzania’s fintech market is rapidly gaining momentum, ranking 3rd in startup fundraising across Africa in Q1–Q3 of 2024, following Kenya and Egypt. During this period, Tanzanian startups raised USD 53 million, with a significant contribution from Nala’s USD 40 million funding round. Africa’s startup ecosystem experienced a sharp decline in funding, dropping from USD 2.9 billion in 2023 to just USD 636 million by Q3 2024. Tanzania’s fintech players continue to attract regional and global interest, underscoring the country’s growing innovation potential.

However, Tanzania’s fintech ecosystem still faces policy and regulatory hurdles. Tanzania’s fintech startups operate in an evolving regulatory environment, with the policy and legal frameworks lagging behind the rapid innovation and innovative business models emerging in the sector. Investors report uncertainty around compliance, intellectual property protection, and difficulty navigating the Tanzanian legal system. These concerns and broader global macroeconomic pressures have contributed to a more cautious investment climate.

Despite these barriers, policymakers, regulators, and development partners have taken critical steps to strengthen the enabling environment. In 2024, the Bank of Tanzania launched the BoT Fintech Regulatory Sandbox and accompanying regulations to create a more favorable policy environment for fintech. Similarly, UNCDF has conducted extensive research on Tanzania’s fintech sub-sector and supported its growth through the Pesa Tech Accelerator.

This playbook builds on UNCDF’s recent policy and regulatory mapping to equip investors with a clear, actionable guide to navigating and investing in Tanzania’s fintech sector. It outlines the fintech regulatory landscape, profiles key market segments and players, and examines the opportunities and risks facing investors ready to engage in Tanzania’s dynamic digital finance market.