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Stakeholders laud BoT's move to ban unauthorised digital lending apps
What you need to know:
- Governor Tutuba also warned Tanzanians against engaging with unauthorised digital lending platforms, noting that the BoT is working closely with the Tanzania Communications Regulatory Authority (TCRA) to block access to these illegal services.
Dar es Salaam. Stakeholders in the financial sector have commended the Bank of Tanzania (BoT) for taking decisive action by banning 69 digital lending applications that were operating without the necessary licenses and permits.
The move follows the BoT’s determination that the platforms did not meet regulatory requirements.
Father Dennis Wigira, parish priest of St. Joseph’s Parish in Dar es Salaam and representative of His Eminence Archbishop Jude Thaddeus Ruwa’ichi, voiced support for the action during the launch of Mkombozi Commercial Bank’s new strategic agent service on November 25, 2024.
The service aims to enhance accessibility and customer reach.
This decision follows the BoT’s public statement on November 21, 2024, which announced the suspension of the aforementioned digital lending apps. The apps were found in violation of the “Guidance Note on Digital Lenders under the Second-Class Microfinance Service Providers, 2024,” which was issued on August 27, 2024.
BoT Governor Emmanuel Tutuba emphasised that the central bank’s guidance aims to strengthen oversight of Second-Class Microfinance Service Providers and ensure compliance with consumer protection regulations for financial services.
These regulations focus on transparency, proper disclosure of fees and interest rates, ethical debt collection practices, and the protection of customers’ personal information and privacy.
Governor Tutuba also warned Tanzanians against engaging with unauthorised digital lending platforms, noting that the BoT is working closely with the Tanzania Communications Regulatory Authority (TCRA) to block access to these illegal services.
Father Wigira expressed gratitude to both the BoT and TCRA for their efforts to regulate the digital lending space.
He commended the approval of banks to offer agent services, which he believes will contribute positively to the economy by increasing access to financial services in underserved communities.
“We must maintain professionalism in the financial sector,” Father Wigira said. “Customers value trustworthy service providers who follow proper banking procedures. When shortcuts are taken, it undermines the entire financial system and tarnishes the reputations of institutions, including the Church.” He said.
An Associate Professor of Development Economics at the University of Dar es Salaam, Dr Abel Kinyondo underscored the importance of public awareness in helping citizens identify unethical financial institutions.
He highlighted that the BoT plays a crucial role as the custodian of the country’s financial system, with the authority to either register or revoke licences for financial institutions.
“It is essential that the BoT ensures all financial institutions operate within the law, creating a fair and competitive environment for all players,” he said.
Among the 69 digital lending apps suspended by the BoT are Boba Cash, Hewa Mkopo, Money Tap Soko Loan,Bola Kash, Hi Cash, Mpaso Chap Loan, Sunloan, Bongo Pesa, HiPesa, Mum Loan, Sunny Loan, Cash Mkopo, Jokate Foundation Imarisha Maisha, My Credit, Swift Fund, CashMam, L-Pesa Microfinance, Okoa Maisha-Mkopofast, and Twiga Loan.
