Equity Bank Tanzania announced the acquisition of TaraJibu, a Dar es Salaam-based mobile lending startup, for $40 million in a deal that marks the largest fintech acquisition in Tanzania's history.

The transaction, which is subject to regulatory approval, will give Equity Bank access to TaraJibu's proprietary credit scoring technology and its base of over 200,000 active borrowers, primarily small and medium-sized enterprises.

Digital Push in Tanzania

"Tanzania represents a massive opportunity for digital financial services," said James Mwangi, Group CEO of Equity Holdings. "TaraJibu has built something remarkable — technology that can assess credit risk for businesses that have never had access to formal lending. Combined with our balance sheet and distribution network, we can scale this across the country."

TaraJibu, founded in 2019 by a team of Tanzanian and international entrepreneurs, has disbursed over $150 million in small business loans since its launch. The platform uses alternative data sources — including mobile money transaction history, utility payments, and social connections — to assess creditworthiness for businesses without formal financial records.

"Most small businesses in Tanzania have never had a bank loan. They're invisible to the formal financial system. Our technology changes that."

— Sarah Mbele, Co-founder & CEO, TaraJibu

The Deal Terms

Under the agreement:

• Equity Bank Tanzania will acquire 100% of TaraJibu's shares
• TaraJibu's leadership team will remain in place for at least three years
• Technology platform will be integrated with Equity's mobile banking app
• Staff retention is guaranteed for all 85 TaraJibu employees

The $40 million valuation represents approximately 8x TaraJibu's 2025 revenue, a premium that reflects the strategic value of its technology and customer base.

SME Lending Gap

The acquisition addresses a critical gap in Tanzania's financial sector. Despite SMEs accounting for approximately 27% of GDP and 60% of employment, formal credit penetration remains extremely low.

According to Bank of Tanzania data, less than 10% of registered SMEs have ever received a bank loan. Traditional credit assessment methods, which rely on audited financial statements and collateral, effectively exclude most small businesses.

"The challenge has always been information," said Dr. Honest Ngowi, an economist at the University of Dar es Salaam. "Banks couldn't assess credit risk for businesses that don't keep formal records. Technology like TaraJibu's changes that equation."

Competitive Landscape

The acquisition intensifies competition in Tanzania's increasingly crowded fintech space. Other players with significant SME lending operations include:

• M-Pesa's Fuliza (overdraft product with Vodacom)
• Tigo Pesa Nivushe (mobile lending partnership with Commercial Bank of Africa)
• Branch International (app-based lending platform)
• NCBA Loop (digital business banking platform)

Equity Bank's entry with enhanced technology could accelerate market growth while also pressuring margins across the sector.

Regulatory Considerations

The Bank of Tanzania has been supportive of digital financial innovation while maintaining oversight of consumer protection and systemic stability. Approval for the acquisition is expected within 90 days.

"The regulator understands that innovation is essential for financial inclusion," said Mwangi. "We've had constructive discussions about how this acquisition will be structured to protect consumers while expanding access."

What This Means

For Tanzania's small business sector, the acquisition could accelerate access to formal credit at a crucial moment. As the economy continues to formalize and digital payments become ubiquitous, the infrastructure for scaled SME lending is increasingly in place.

For the regional banking sector, the deal signals continued consolidation and the growing importance of technology in competitive positioning. Banks that fail to build or acquire digital capabilities risk being left behind.