The officials from the Bank of Tanzania (BoT) have provided public education on safe loans and the process for obtaining a license to offer financial services, targeting business people, entrepreneurs, and the general public.
In a special interview with journalists, Senior Legal Officer of the Bank of Tanzania (BoT), Ramadhani Myonga, stated that this educational initiative is being implemented following the results of a recent investigation conducted by BoT through a special report called the Kimangala Report, which revealed that residents of Iringa region are among those affected by unfavorable loans known as "harmful loans" or Kimangala.
He mentioned that this education is aimed at informing the public about how to identify safe loans from various financial institutions registered with the Bank of Tanzania.
Myonga advised citizens that when they want to take a loan from financial institutions, it is crucial to know various things about the institutions they wish to borrow from, ensuring they have a valid license, as this will help in case of any issues with their loan, allowing them to take legal action. If an institution violates the terms set by the Bank of Tanzania, it may lose its license and be barred from providing services.
He added that every financial institution must have a desk to resolve disputes between them and customers, and that when a dispute is presented at that desk, it must be resolved within 14 days. If it is not resolved, an additional seven days can be added, and if it still fails, the customer can write to the Bank of Tanzania to present their dispute with the relevant institution.
" citizens should be more careful before borrowing by reading the loan agreement, as it is very important to understand its terms before signing, rather than rushing to sign." he said.
Myonga also stated that borrowers should consider the purpose of the loan they are taking; they should not borrow for non-developmental activities, as some people take loans to fund celebrations, which leads to many failing to repay their loans.