BoT instructed to protect Tanzanians against the effects of borrowing from informal institutions

TANGA: THE Bank of Tanzania (BoT) has been directed to intensify its oversight of the financial sector in order to protect Tanzanian citizens from the negative effects of borrowing from informal financial institutions, a practice that has caused some people to lose their property and resources due to loans with exploitative conditions.

The directive was issued by the Minister for Finance, Ambassador Khamis Mussa Omar, through a speech delivered on his behalf by the Deputy Minister for Finance, Laurent Deogratius Luswetula, during the opening of the National Financial Services Week held at Usagara Grounds in Tanga Region.

In his speech, the Minister for Finance said many Tanzanian citizens have continued to face various challenges as a result of borrowing from informal institutions, stressing the importance of the public obtaining accurate information on the legality of financial institutions before taking loans.

He also urged citizens to carefully read and fully understand loan agreements before signing them, to avoid losses resulting from entering into contracts without understanding their terms and conditions.

Meanwhile, the Governor of the Bank of Tanzania, Emmanuel Tutuba, through a speech delivered on his behalf by the Director of Consumer Protection and Financial Inclusion, Mr. Kennedy Komba, said BoT has established and strengthened various systems aimed at enhancing transparency, consumer protection, and access to financial services.

He noted that these systems particularly benefit consumers who have complaints against financial service providers or who lack complete information on costs, charges, and the methods used to calculate interest and loan repayments.

Among the systems mentioned are complaint submission and management systems (SEMA and BoT), a price comparison platform, a loan cost calculator, and a collaborative supervisory framework for Tier II microfinance service providers. These initiatives have been said to improve transparency, efficiency, and the quality of financial services in compliance with existing laws and regulations.

The National Financial Services Week, taking place from January 19 to 26, 2026, aims to enhance public awareness of financial matters and promote the use of formal financial services for the development of individuals and the nation as a whole.