Public outcry as unregulated online loan apps continue to harass borrowers

Although the loan helped her meet an urgent need, the relief was short-lived.

Three days before the repayment date, Ms Jasir began receiving calls demanding early repayment.

When she missed the deadline by two days, the calls escalated into threats and harassment.

“My relatives, friends, even my boss, were told I had defaulted on a loan and that I was a fraud. Insults, threats, and mockery became part of daily life. I felt the world had turned against me,” she said, adding that some messages portrayed me in ways that do not reflect who I am.

The experience left her traumatised. Anyone with her number received defamatory messages accusing her of criminal behaviour, damaging her reputation and mental wellbeing.

Ms Jasir, from Arusha, is one of many Tanzanians humiliated by online lenders who abuse access to users’ phone contacts, sending false, threatening, and degrading messages to collect debts.

These apps typically offer quick cash with no collateral, requiring only a national ID. While they meet urgent financial needs, many users soon fall victim to digital harassment if they miss repayments.

Unable to contact lenders through official channels or locate physical offices, borrowers often have no way to report abuse or seek redress.

In some cases, messages to contacts are vulgar and deeply defamatory: Example 1: “Hello dear, (Client’s name) is here in the neighbourhood, my work number is (client’s phone number). Today I have a special offer, I’m selling my body to get money… The price is cheap; we’ll agree. You’re very welcome, dear.”

Example 2: “Hello, 0000000 is using their ID to scam money online. They are a thief, a fraud, a pickpocket… BORAPESA company is seeking them for fraud, theft, and scamming Sh357,000… We’ve attached their photo and ID on WhatsApp to confirm.”

Such messages are often mass-sent to family, friends, colleagues, and even employers.

Borrowers speak out

One borrower said the abuse is so extreme that many stop repaying altogether, feeling no moral obligation after being publicly shamed.

“People are being harassed under the pretext that online loans are high-risk. It’s like being held hostage. To avoid humiliation, a borrower must either pay a bribe or the full loan,” said one client under anonymity.

He explained that agents show borrowers the exact message they plan to send to all contacts if they don’t comply.

Mr Mjakani Masesa echoed concerns, saying authorities appear to have turned a blind eye, allowing harassment to continue unchecked.

A growing crisis with no oversight

As digital lending platforms expand across Tanzania, their lack of regulation poses a serious threat to consumer rights.

Without clear laws, enforcement mechanisms, or oversight, these companies operate in a legal grey area, leaving borrowers vulnerable.

Until action is taken, borrowers like Ms Jasir will continue to suffer in silence, forced to choose between dignity and debt.

Mr Masesa said the issue is overlooked by authorities, with no legal action against offenders, “Yes, they have registered companies, but at least they should face prosecution for harassment. That would greatly help curb these acts.”

On November 21, 2024, the Bank of Tanzania (BoT) suspended 69 mobile lending apps for issuing digital loans without licences or proper authorisation.

BoT Governor Emmanuel Tutuba said the platforms failed to meet requirements under the 2024 guidelines for second-tier digital microfinance service providers, issued on August 27, 2024.

Despite the suspension, the practice continues, prompting Vice President Dr Philip Mpango to urge BoT to revisit the matter.

Dr Mpango said mobile lenders operating under various names continue issuing loans without legal recognition or compliance.

He noted that these operators charge exorbitant interest, violate borrowers’ privacy, and share personal information without consent.

“From this platform, I warn such groups to stop these practices immediately. They are illegal. I direct the Bank of Tanzania to closely monitor this issue to protect citizens, most of whom are small borrowers,” he said.

Where is the problem?

Independent lawyer Dr Onesmo Kyauke said the core issue is weak legal oversight.

He noted that banks are strictly regulated by the Central Bank and cannot disclose customer data unless legally required, unlike online lenders.

“I don’t know if this is regulated by the Tanzania Communications Regulatory Authority (TCRA). Perhaps there’s no law mandating licensing or a clear legal process for debt collection,” he said.

Lawyer, Mr Dominic Ndunguru, said lending is a professional service that must follow ethical standards, which are lacking in online lending.

“Many platforms lack proper licences, allowing unqualified individuals to issue loans, widening the ethical gap. There are no clear guidelines or codes of conduct; regulations are still based on traditional banking practices,” he said.

He proposed that BoT establish clear guidelines and ethical standards, including training lenders in respectful practices. He also emphasised the need for a data protection law.

“Victims can sue for compensation. Institutions that collect and use people’s data without consent can be taken to court,” he said.

“This harassment continues because no lawsuits are filed. If just a few companies were sued and fined, the problem would stop,” he added.

Cybersecurity and oversight

TCRA Chief Communications Officer, Mr Semu Mwakyanjala, said shaming borrowers via SMS is a criminal offence.

“TCRA licenses all service providers and enforces procedures. It is a criminal offence. When legal matters arise, the police handle them. A cybercrime unit patrols online activities, and TCRA assists in prosecution,” he said.

He noted that TCRA does not supervise online lenders directly, as they operate under BoT-issued financial licences.

BoT response and reporting procedures

BoT Governor Emmanuel Tutuba encouraged affected individuals to report incidents with evidence to BoT offices nationwide.

“Complaints can also be submitted via the BoT electronic system ‘Sema na BoT’ on the Central Bank’s website. There’s a link at the bottom of the homepage for submitting complaints, which will be acted upon,” he said.