How flexible, tech-driven payment plans are enabling Tanzanians acquire assets

Today, motorcycle riders can acquire bodabodas through lease-to-own arrangements, traders can secure smartphones and repay in instalments, while entrepreneurs can obtain vehicles and equipment through technology-enabled financing products.

Industry players say digital financing is helping bridge longstanding gaps in access to credit, particularly among young people and workers in the informal sector who often lack the collateral or employment records required by traditional lenders.

Kinondoni-based car dealer Emmanuel Mkonyi said technology-enabled vehicle financing has made car ownership more accessible while helping dealers manage repayment risks.

Customers can choose from a range of financing arrangements depending on their financial circumstances, with technology playing a central role in enforcing repayment agreements, he said.

“If a customer fails to make a payment by the agreed date, the system automatically disables the vehicle, making it unusable until they contact us.

We can also track the location where the vehicle has been immobilised, allowing us to follow up when necessary,” said Mr Mkonyi.

He explained that customers purchasing vehicles available in the showroom are required to pay 50 percent of the vehicle's value upfront, with the balance settled over six months to one year.

For imported vehicles, buyers can pay a 20 percent deposit before shipment, an additional 30 percent upon arrival, and clear the remaining balance through an agreed repayment schedule.

“The demand for vehicle financing has grown rapidly because many people want to own cars but cannot afford to pay the full amount at once.

Technology has made it possible for us to offer financing while still protecting our business,” he said.

Mr Mkonyi said prospective customers are required to submit bank statements and other financial records to assess their cash flow and repayment capacity.

“Without proper assessment, the risks would be too high,” he said.

According to him, financing has become the dominant sales model for the business, reflecting growing demand for flexible payment solutions.

“Since introducing the system about two years ago, most of our vehicle sales have been conducted through financing arrangements. We have not experienced significant repayment challenges because we strictly adhere to the screening process,” he said.

Independent economist Oscar Mkude said the growing use of technology in asset financing reflects the evolution of Tanzania’s digital economy and highlights the role innovation can play in expanding financial inclusion.

“What we are witnessing is a practical example of how the digital economy is transforming access to financial services.

Processes that previously required lengthy physical interactions can now be completed much faster and more conveniently through technology,” he said.

Mr Mkude noted that digital platforms are reducing transaction costs, accelerating loan approvals and enabling lenders to monitor repayments more efficiently.

However, he cautioned that lenders must continue strengthening customer assessment procedures to ensure borrowers can meet their obligations.

“Sustainability will depend on balancing accessibility with prudent risk management,” he said.

Despite such concerns, Mr Mkude said the broader economic impact remains positive.

“Access to financing for productive assets allows more people to participate in economic activities.

It creates opportunities for entrepreneurship, supports business expansion and contributes to broader financial inclusion,” he said.

He added that digital financing is lowering barriers to entry for aspiring entrepreneurs by reducing the amount of capital needed to start a business.

“In many cases, individuals no longer need large amounts of savings to begin income-generating activities.

Technology-based financing enables them to acquire the tools they need and gradually pay for them as their businesses grow,” he said.

For her part, smartphone loan agent Martha Mlay said she launched her business in January this year and offers various smartphone brands through partnerships with suppliers.

Customers enter financing agreements through authorised agents, while the devices are linked to digital repayment systems capable of restricting certain functions when payments are missed.

“We started operating in Buguruni Malapa, where customers can acquire smartphones and repay daily, weekly or monthly depending on their income levels.

Daily repayments start from Sh1,200, although the exact amount varies according to the type of phone and repayment period,” she said.

According to Ms Mlay, demand has exceeded expectations as many customers cannot afford to purchase smartphones outright, while others need replacements after losing or damaging their devices.

The business has also created employment opportunities for young people through a growing network of agents who help identify and recruit customers.

“I pay a commission of Sh30,000 for every smartphone an agent successfully facilitates.

This encourages them to bring in customers they know personally, helping to reduce the risk of defaults,” she said.

Buguruni resident Lightness Fisoo said she acquired a smartphone through the programme after her previous device became unusable.

“I operate a small business and my phone is important for communicating with customers.

When the screen of my old phone broke, I could not afford to buy a new smartphone immediately.

This financing option gave me an alternative,” she said.

Ms Fisoo, who currently repays Sh1,200 a day, said the arrangement has enabled her to continue running her business without disruption.

For his part, Tanzania Communications Regulatory Authority (TCRA) Head of Communications and Public Relations, Mr Rolf Kibaja, said TCRA regulates communications infrastructure, services and applications through licensing processes, while ensuring the availability of communication resources such as radio frequency spectrum and numbering resources that support, among other services, digital financial solutions.

“This support helps innovators, including those in the digital finance sector, refine their solutions without committing significant financial resources during the early stages of development. As a result, innovative digital financial services can be developed and scaled more efficiently, creating greater opportunities for Tanzanians to access digital financial services and participate in the digital economy,” he said.

He said TCRA will continue implementing various initiatives aimed at creating an enabling regulatory environment that promotes innovation and enhances digital financial inclusion by ensuring the regulatory framework remains agile enough to keep pace with technological advancements.

Some of these initiatives include the periodic review of regulations and rules, the review of licensing fees and conditions, and the provision of communication resources free of charge to innovators for testing the technical and commercial viability of their ideas before full-scale market deployment.

“This approach ensures a stable and predictable business environment in the sector, reduces entry barriers, encourages experimentation, and promotes the development of innovative ideas, including digital financial solutions,” he said.