BoT launches nationwide campaign against predatory lending
MTWARA: THE Bank of Tanzania (BoT) has launched a nationwide roadshow as part of a public education campaign aimed at combating predatory lending practices, commonly known as “shark loans.”
A BoT analyst, Deogratius Mnyamani, said at a Bank of Tanzania seminar for senior business and financial journalists in Mtwara on Wednesday that the initiative seeks to educate Tanzanians about the dangers of these loans, which carry exorbitant interest rates, and to promote responsible borrowing for development activities.
“Our goal is to ensure that Tanzanians are fully informed about the risks associated with predatory lending and empowered to make sound financial decisions,” Mnyamani said at the seminar aimed to enhance journalists’ understanding of the central bank’s operations and improve public awareness of key financial issues.
Mnyamani revealed that the roadshow campaign has commenced in Dar es Salaam and will be extended to other regions across the country.
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Mnyamani emphasised the BoT’s commitment to ongoing public education regarding the risks of predatory loans and the importance of obtaining credit from licensed lenders.
He also outlined the BoT’s strategy to strengthen collaboration with local and national government authorities, including capacity building, to effectively address the issue of unlicensed microfinance service providers.
“In the near future, the Bank of Tanzania will introduce mechanisms to identify unlicensed microcredit lenders,” Mnyamani announced.
“We will also develop a system to display interest rates charged by licensed microcredit providers, enhancing transparency for borrowers.”
The BoT is actively utilising various media platforms to disseminate its message. Educational campaigns, including radio, television, and newspaper initiatives, feature compelling slogans such as “Zinduka Usiumizwe” (Wake Up, Don’t Be Harmed) and “Kopa kwa Maendeleo” (Borrow for Development).
“The objective is to educate and empower Tanzanians to avoid falling prey to predatory or shark loans,” Mnyamani stated.
“Loans that drain blood,” an unofficial but widely understood Kiswahili term, encapsulates the severe consequences of these exploitative financial products, characterised by excessive interest rates, harsh repayment conditions, and excessive fees and charges.
These predatory loans also feature difficult loan repayment processes and illegal debt collection practices, including offensive language, threats, humiliation, and theft.
