Govt issues guidance for digital lenders
The Bank of Tanzania (BoT) yesterday issued a new guidance note on digital lenders under tier 2 microfinance service providers, aimed at strengthening the supervision of digital lending operations in the country.
The central bank issued the guidance because digital lending grows in popularity, the need for a robust regulatory framework has become increasingly apparent.
“The guidance note aims to ensure compliance with financial consumer protection regulations, which include transparency, pricing, debt collection practices, protection of personal data, and customer privacy,” the statement shows.
The guidance note is designed to ensure that tier 2 microfinance service providers operate transparently and ethically.
This commitment underscores the importance of safeguarding consumer interests in a rapidly evolving financial landscape.
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The new regulations require all tier 2 microfinance service providers engaged in digital lending to adhere to the outlined requirements.
The BoT has made it clear that compliance is not optional, stating, “Failure to comply with this directive will result in administrative sanctions including penalties, suspension of digital lending, and revocation of microfinance tier 2 business license.”
This strong stance reflects the central bank’s dedication to maintaining ethical practices within the industry.
Furthermore, to foster transparency, the BoT plans to publish and regularly update a list of approved tier 2 microfinance service providers.
This list will serve as a valuable resource for consumers seeking trustworthy digital lending options.
As the financial sector adapts to new technologies, the issuance of this guidance note marks a pivotal moment for digital lending in the country.
By promoting ethical practices and consumer protection, the Bank of Tanzania is setting the stage for a more resilient and trustworthy financial ecosystem, ultimately benefiting both providers and consumers alike.
