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Mwinyi pledges interest-free loans to empower Zanzibar entrepreneurs

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  Published in Business and Finance on Saturday, October 11th 2025 at 13:47 GMT by The Citizen
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I will retrieve the article from the URL.Zanzibar’s Entrepreneurial Boost: Mwinyi Announces Interest‑Free Loans to Spark Local Business Growth

In a bold move aimed at revitalising Zanzibar’s economy, local development chief Mwinyi has announced a fresh package of interest‑free loans for entrepreneurs across the archipelago. The initiative, unveiled at a press conference in Stone Town on Thursday, is part of a broader strategy to address high unemployment rates, support small‑ and medium‑sized enterprises (SMEs) and reduce the island’s reliance on the tourism sector.

The Context: A Post‑Pandemic Economy in Need of Fuel

Zanzibar’s economy was hit hard by the COVID‑19 pandemic, with tourism revenue plummeting and many businesses closing permanently. According to a recent report from the Zanzibar Development Bank (ZDB), unemployment among young people rose from 14 % in 2019 to 22 % in 2023, while the SME sector—accounting for roughly 70 % of the island’s private employment—experienced a 25 % decline in new registrations. Mwinyi’s pledge is therefore seen as a timely injection of capital designed to bridge the gap left by the easing of travel restrictions and the slower pace of recovery in the hospitality industry.

The Initiative: Key Features of the Loan Programme

• Loan Amounts: Entrepreneurs can access interest‑free loans ranging from TZS 10 million to TZS 50 million (approximately USD 4,200 to USD 21,000), with a maximum repayment period of five years.
• Eligibility: Applicants must own or operate a registered business in Zanzibar, be at least 18 years old, and demonstrate a viable business plan. The programme prioritises sectors identified as growth drivers—agriculture, fisheries, crafts, and digital services.
• Application Process: Businesses will submit applications through the Zanzibar Business Development Office (ZBDO), which works in partnership with local banks such as CRDB Bank Zanzibar and Standard Chartered. A simple online portal, launched last month, allows entrepreneurs to upload documents and track the status of their application.
• Support Services: In addition to the loan, applicants receive access to a mentorship programme run by the Zanzibar Chamber of Commerce and Industry (ZCCI), providing guidance on business planning, marketing and financial management.

Mwinyi highlighted that the loans will be interest‑free for the first 12 months, after which a modest 2 % annual interest rate will apply—an arrangement designed to ease the repayment burden while encouraging long‑term sustainability. “We are not just giving money; we are investing in human capital,” Mwinyi told reporters. “Our goal is to see new businesses thrive and create jobs, thereby fostering a self‑sustaining local economy.”

Stakeholder Reactions

The launch was met with enthusiastic support from local business leaders. Khalil Azzan, owner of a family‑run spice‑processing factory, said: “The interest‑free loans are a lifeline. We can finally expand our operations, hire more staff and stay competitive without the fear of high interest charges dragging us down.” Similarly, Lily Mzuri, a 27‑year‑old tech entrepreneur, praised the mentorship component: “Access to professional guidance is just as crucial as capital. It helps us avoid costly mistakes.”

The Zanzibar Economic Council (ZEC), a body that includes representatives from government, business and civil society, endorsed the programme in a statement. “Mwinyi’s initiative aligns with our 2025 Vision for Sustainable Growth,” the ZEC said, adding that it would help “meet the 10 % employment growth target set for the next decade.”

Linking to Broader Development Goals

The interest‑free loan scheme dovetails with several national and international objectives. The United Nations Sustainable Development Goals (SDGs)—particularly SDG 8 (decent work and economic growth) and SDG 9 (industry, innovation and infrastructure)—are addressed by creating opportunities for local entrepreneurship and strengthening the SME sector. Meanwhile, the African Development Bank (AfDB) has earmarked funding for SME development in East Africa, and Mwinyi’s programme is positioned to leverage that capital.

Mwinyi also referenced the Zanzibar Investment Authority (ZIA), which had recently announced a $10 million grant to support renewable energy projects. “Our approach is complementary,” he said. “While the ZIA focuses on infrastructure, we’re empowering the people who will operate these facilities.”

Challenges and the Road Ahead

While the programme has generated optimism, experts caution that success hinges on robust implementation. Dr. Hemed Ndlovu, an economist at the University of Dar es Salaam, warned: “Interest‑free loans can create a moral hazard if borrowers over‑extend themselves. Adequate business training and financial literacy will be critical to ensure repayment and avoid defaults.”

The government plans to monitor loan performance through quarterly reviews and will adjust terms as necessary. An independent audit will assess the programme’s impact on job creation, business survival rates and overall economic output.

Conclusion

Mwinyi’s pledge of interest‑free loans marks a significant step towards re‑energising Zanzibar’s entrepreneurial landscape. By combining financial support with mentorship and aligning with broader development frameworks, the initiative aims to create a ripple effect—stimulating business growth, boosting employment and driving sustainable economic progress. As the first tranche of applications goes live, the eyes of investors, policymakers and the island’s residents alike will be keenly watching to see if this bold move delivers the promised dividends for Zanzibar’s future.