Workers can negotiate loan rates, govt says

DODOMA: THE government has said workers still have room to negotiate lower interest rates on personal loans through their employers, despite growing calls for regulated borrowing costs.

Deputy Minister for Finance Mshamu Munde made the statement in the National Assembly when responding to a basic question from Kigamboni MP Haran Sanga (CCM), who wanted to know when Tanzanian workers would benefit from reduced loan interest rates of around seven or eight per cent.

Ms Munde explained that, under the country’s economic policies, interest rates charged by financial institutions, including those applying to employees, are determined by market forces.

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She said directing financial institutions to impose a fixed seven per cent interest rate or any other specific rate for workers would contradict the principles of a market-based economy.

“However, a financial institution may decide to offer loan interest rates of seven per cent or lower to employees or any other borrower if it deems it appropriate,” she noted.

The Deputy Minister further stressed that workers, like any other borrowers, have the right to engage their bankers and negotiate favourable interest rates whenever possible.