Our dual key investment series features stories of our investments from our investments.

Asilia Limited is a privately owned small growing business based in Arusha, a city of in Northeast of Tanzania situated at the foot of Mount Meru, Africa's 5th highest mountain. The altitude of the city gives it a pleasant climate and lush green environment. Asilia Ltd is the only leather tanning company in the country which uses eco-friendly artisanal vegetable leather tanning technology. Along the value chain, Asilia is further involved in designing, manufacturing and selling of leather products. Tanned leather is further processed into a range of final products for a growing market mainly from the domestic tourism industry (e.g. hotels, lodges, tourists etc.). The company also sells to other companies and intermediaries including enterprises and community based organizations who buy leather for further processing into various goods and decorations.

Leather Sector
Although Tanzania has the second largest livestock in Africa, the country’s market share in leather exports in the African region is remarkably minimal International Monetary Fund (2020).
Most of the livestock keepers in Tanzania live in rural, less developed areas with limited infrastructure such as access to good roads, electricity, water supply and industrial facilities. Lack of these facilities signify limited processing export of raw skins and hides or total waste. The existing slaughterhouses and abattoirs in urban areas have limited processing and storage facilities for skins and hides which further slow down the sector’s contributions to the local economy.

The Project
To overcome some of the mentioned challenges, United Nations Capital Development Fund was able to provide technical and financial support (reimbursable grant of USD 80,000 and seed capital grant of USD 20,000) to enable the company to develop a modern leather processing facility. The funds supported construction of factory house, procurement of various machines, and integration of marginalized women from pastoralist communities in the leather value chain through identification, training, equipping and market linkages. The factory now accommodates a leather processing unit with two drying sheds, staff washrooms and a changing room.

• Location: Arusha City, Arusha Region, Tanzania
• Project Cost: $347,687
• Development Impact: Local Economic Development

Financial Leverage unlocked by UNCDF: The UNCDF’s seed capital grant and the reimbursable financial support has proven to be critical in providing access to sufficient financing for capital investment from a local commercial bank. This is crucial for SMEs, like Asilia, to secure a new asset base, which is important for future scale up and replications. Overall, $52,174 in local development finance has been unlocked.

Investment Impact:

• With the support from UNCDF, Asilia has accomplished the following:
• Acquiring 9 different leather processing machines to bolster processing capabilities from 48,000ft2 to an average of 110,000ft2 over five years.
• Construction of a new 2-floor building structure in Moshono to expand the factory to a total of 360M2.
• Generated source of revenue streams for the local community, especially for women and the youth.
• Contribute to the central and local Government through taxes, land rent, and the service levy.
• Unlocked private funding from a local commercial bank. Through the UNCDF support, Asilia was able to secure 140% above the biggest loan amount the Company has been able to borrow in the last 15 years of operation.
• Through the UNCDF’s support, which resulted ina fixed capital formation, a new asset base was established in the Arusha region. This will harness businesses in the future to scale up and replicate within the region.
• Overall creating a rippling effect on small scale entrepreneurship and employment generation across the district.
• Asilia Ltd will continue to increase its contribution to central and local Government taxes, service levies and utility payments. As the leather products are highly linked to the tourism sector hence providing more multiplier effects on the local economy.

Social Impact:

• Direct Employment – Asilia hired 11 additional full-time staff (5 men and 6 women) and 8 part-time staff (6 men and 2 women). This has brought the total number of employees to 29.
• Indirect Employment – Through its continued partnership with Maasai Community Based Organizations (CBO), 40 marginalized women from rural communities were trained through the tanning process.
• Training – Successfully used an ongoing training program with the intention of integrating marginalized groups in the leather value chain and mostly to improve the participation of women from rural maasai community in the leather sector. Asilia’s program has been able to reach out to 270 rural women providing leather tanning and production, also providing skills on leather products decorations using beads to suite various customer needs.
• In 2022 the emphasis has been on leather product development and marketing linkages. The business is again picking up post COVID-19coupled with surging number of tourists. Some of Asilia’s most demanded products includes furniture (sofas, safari chairs), bags belts, shoes and other leather accessories.

This teaser was written by Chanja Mwombela Investments Impact Officer, Data Collection & Measurement and Fidelis Luteganya, Fidelis Luteganya is the Finance & Investment Officer for the for UNCDF in Tanzania, as one of the principal participant in this investment , he answered the following questions:

• What made you enthusiastic about this investment?
Supporting the business on a transformative journey impacting the community at large and providing services to a market within the country. The project was giving opportunity to a marginalized community of livestock keepers to enhance their skills on using readily available material (skin/hides) to enable them to obtain income, especially women and youth. Asilia’s factory sits on the outskirts of Arusha city, its establishment brings essential services like utilities (water, electricity etc) not only to the factory but also to surrounding community thus improving the living standards of the nearby households.
The technology used is eco-friendly and a potential to encourage other growing production industries in the country to learn and replicate especially in this era with increased demand for sustainable solutions.

• What were the challenges faced by this project?
One of the main challenges faced was COVID-19, which significantly affected the business since sales linked to tourists plunged impacting the overall profitability. The factory was forced to stop production because of low demand and challenges in the supply chain and logistics. The employees were laid off and they even lost an employee from COVID-19. Few remaining staff had pay cuts, which affected their ability to support their families.

Another challenge was the increased prices in machines and raw materials, which hindered procurement of all the expected machines given the available resources.

• What are the lessons learned from this example?

One lesson learned is on how a good business proposition can bring significant impact transforming communities and livelihood. The once considered waste (skin & hides) are now becoming sources of alternative income and empowerment for marginalized communities.

Asilia Company Ltd has mobilized livestock keepers to establish formal out-keeper groups in the Maasai villages. These groups, which are mainly women have been provided with several trainings in vegetable skin processing technology, handling, and storage. As a result, the Maasai women have increased the value of skins and hides, improved shelf-life and their income because of a guaranteed market not dependent on regions far away due to the poor infrastructure.

for more information please contact

Fidelis Luteganya : fidelis.luteganya@uncdf.org / Chanja Mwombela : chanja.mwombela@uncdf.org