Tanzania says no mandatory 7pc loan rate for workers

By Katare Mbashiru

Dodoma. The government has said it will not impose a fixed interest rate of 7 or 8 percent on loans taken by Tanzanian workers, maintaining that lending rates in the country are determined by market forces in line with national economic policy.

Deputy Minister for Finance Mshamu Munde made the statement in Parliament on Tuesday, February 3, 2026, while responding to a question by Kigamboni MP Haran Nyakisa Sanga.

The legislator sought to know when workers would benefit from reduced loan interest rates to the level of 7 or 8 percent.

In his response, Mr Munde explained that interest rates charged by financial institutions to various customers, including employees, are set by the market and not by government directive.

“Directing financial institutions to set interest rates at seven percent or any other specific level for workers would contradict the country’s market-oriented economic policies,” he told the House.

However, the deputy minister noted that individual financial institutions are free to offer loans to workers or any other borrowers at interest rates of seven percent or even lower, if they deem it appropriate.

He added that borrowers themselves can negotiate with banks to secure lower interest rates depending on their financial profiles and agreements reached.

Furthermore, Mr Munde said employers also have an opportunity to engage directly with banks on behalf of their employees to negotiate favourable loan terms, including reduced interest rates.

The government’s position, he said, aims to preserve a competitive financial sector while encouraging dialogue between lenders, employers and borrowers to achieve more affordable financing options for workers.