By Business Insider Reporter
The Bank of Tanzania (BoT) has launched the second round of its Financial Technology (FinTech) Regulatory Sandbox – a controlled environment that allows startups and tech-driven financial service providers to test innovative products under its supervision.
This initiative aims to support the development of cutting-edge financial solutions while ensuring consumer protection and regulatory compliance.
By enabling live testing of digital financial services, the sandbox (Safe testing space) is designed to foster innovation that can expand access to affordable, inclusive, and convenient financial tools – particularly for underserved individuals and small businesses traditionally excluded from formal financial systems.
Announced earlier this month by Deputy Governor Sauda Msemo, who oversees financial stability and inclusion, the second cohort builds on the success of the first phase and signals BoT’s ongoing commitment to advancing Tanzania’s digital financial ecosystem.
Through this programme, the BoT hopes to strengthen the regulatory framework for emerging technologies while empowering local innovators to solve real-world financial challenges.
“The application window for the 2nd Cohort is currently open and will close on Thursday, 23rd October, 2025,” Deputy Governor Msemo noted in the statement announcing the development.
This sandbox is a critical step in Tanzania’s broader digital transformation agenda. It provides a safe and supervised space where financial solutions not currently covered by existing regulations can be trialed with real users – without the immediate burden of full compliance.
The move is aimed at encouraging innovation while managing risks, particularly in areas such as mobile lending, digital identity, blockchain applications, and AI-driven financial services.
Sector experts describe the sandbox as a game-changer for both startups and the unbanked, offering a rare chance to innovate within a supportive regulatory environment. Rather than acting as a barrier, BoT becomes a partner in responsible innovation.
Startups and FinTech entrepreneurs stand to gain the most, as the sandbox lowers early regulatory hurdles and allows new products to be tested and refined more efficiently and affordably.
For unbanked and underserved communities – particularly in rural areas and the informal economy – the initiative opens the door to affordable, tailored financial solutions that might otherwise never reach them.
The programme also strengthens investor and institutional confidence by signaling regulatory openness and a willingness to embrace new technologies, potentially unlocking fresh capital and partnerships.
For the Bank of Tanzania, the sandbox provides valuable insight into emerging innovations, allowing it to craft smarter, more adaptive regulations that protect consumers without stifling progress.
With digital financial services rapidly transforming economies across Africa, Tanzania is positioning itself as a pro-innovation, pro-inclusion hub. The BoT’s sandbox is not just a regulatory tool – it’s a signal that Tanzania is open for innovation, while committed to financial stability and consumer protection. Participants from the first cohort have already praised the sandbox for helping them align with regulatory expectations while refining their business models.
