Stop loan sharks from milking the youth
DAR ES SALAAM: THE National Assembly that has convened and ongoing deserves credit for once again putting the spotlight on one of the most quietly destructive forces in the economy: predatory lending. While loans are meant to support enterprise, resilience, and opportunity, far too many have instead become instruments of exploitation, especially for the poor, the youth, and small entrepreneurs struggling to stay afloat.
Recent parliamentary discussions on high-interest, unregulated loans signal that lawmakers understand the urgency of the problem.
This is commendable. At a time when the government is rightly focused on lifting citizens, particularly young people and women out of poverty, it would be self-defeating to allow ruthless lending practices to undermine those very efforts. Predatory lenders thrive where desperation meets weak oversight.
They promise quick cash, demand minimal paperwork, and deliver eye-watering interest rates that turn small loans into lifelong burdens. Borrowers often discover too late that they have signed up not for financial support, but for a cycle of debt that grows faster than their income.
The government has taken steps in the right direction. Public education campaigns encouraging citizens to borrow only from licensed institutions are important. So is the identification and shutdown of illegal digital lending platforms operating outside the law.
ALSO READ:
Suspending dozens of unlicensed programmes and closing many others sends a strong signal that the era of “borrow today, suffer tomorrow” must end. Yet enforcement alone is not enough. Predatory lending adapts quickly.
As regulations tighten in one area, exploitative practices resurface elsewhere, often hidden behind mobile apps, vague terms, and fine print few borrowers fully understand. This is why the proposed regulations governing digital lending cannot come soon enough and why they must be tough, clear, and strictly enforced. Transparency should not be optional.
Borrowers deserve full disclosure of interest rates, penalties, recovery methods, and total repayment costs before they click “accept.” Ethical lending should be the minimum standard, not a voluntary gesture. Any institution that profits from confusion, fear, or financial illiteracy has no place in a fair economy.
Parliament’s role in debating these issues is critical. By asking hard questions and demanding accountability, legislators help ensure that financial inclusion does not become a slogan that masks exploitation. The focus on financial literacy and that is through national education programmes and outreach across regions, which are equally vital. Empowered borrowers are harder to exploit.
Still, more must be done. Regulations must be tightened further, enforcement strengthened, and penalties made severe enough to deter repeat offenders. Suspending licences should not be the last resort but a real and credible threat. The poor should not have to choose between hunger and usury.
If the government is serious about economic empowerment as we see it and there is strong evidence that it is, then protecting citizens from predatory lending must be treated as a development priority, not a side issue. Credit should be a ladder out of poverty, not a trapdoor beneath it. The discussion has begun. Now the screws must be tightened and firmly, consistently and without fear.
