No fixed repayment terms for disability loans, House told
DODOMA: THE government has said there is no fixed repayment period for loans issued to persons with disabilities under the 10 per cent loan scheme, telling the National Assembly that timelines depend on the nature of the financed activities.
Deputy Minister in the Prime Minister’s Office responsible for Regional Administration and Local Government (PMO-RALG), Dr Festo Dugange, made the clarification while responding to a basic question from Mbulu Rural MP, Dr Emanuel Nuwas, who sought to know whether there was a need to extend repayment periods for the two per cent loans allocated to persons with disabilities to promote equity.
Dr Dugange said the law, regulations and guidelines governing the issuance, management and recovery of the loans do not prescribe a specific repayment timeframe. Instead, he said, repayment arrangements are agreed upon between local government authorities and borrowers, taking into account the type of project and expected cash flow.
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“The duration and mode of repayment for all groups, including persons with disabilities, are based on mutual agreement between councils and borrowers, depending on the nature of the investment,” he explained.
Dr Dugange said that the approach is designed to improve the performance of income-generating activities while ensuring effective loan recovery.
In a supplementary question, Special Seats MP (CCM), Stella Ikupa raised concerns that some persons with disabilities had their three wheelers famously known as Bajaj repossessed for allegedly failing to repay loans within two or three years.
In response, Dr Dugange maintained that there is no uniform repayment period, noting that different economic activities require different timelines. He further said that while agricultural projects may take longer to generate returns, some borrowers who acquire income-generating assets such as motorcycles or Bajaj may agree with councils on repayment periods of two to three years.
“This does not mean all borrowers are subject to the same timeframe, as each loan is structured according to the activity being financed,” he said.
Newala Urban MP, Mr Rashid Mtima also sought clarification on government plans to improve access to the loans, citing challenges faced by wananchi in obtaining funds through designated banks. Dr Dugange acknowledged the challenges, noting that under the new system introduced in the 2024/2025 financial year, performance has varied between councils and banks.
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He said more than 85 per cent of funds had been disbursed in 174 councils that continued to provide loans directly, compared to only 22 per cent disbursed through banks in 10 pilot councils. The Deputy Minister assured the House that the government has engaged banks and other stakeholders to improve the speed of loan disbursement.
Meanwhile, Kilolo MP Ritta Kabati proposed that women caring for children with disabilities be considered as a special category in the loan scheme. Dr Dugange said the current framework recognises three groups, women, youth and persons with disabilities.
However, the minister said that women with children with disabilities can access loans through the four per cent allocation for women and use the funds to support their families.
The deputy minister also encouraged parents and guardians of children with disabilities to present their challenges to local government authorities for consideration and possible support.
