Regulatory Alerts2024-01-01
Guidance Note on Digital Lenders Under Tier 2 Microfinance Service Providers, 2024
The Bank of Tanzania has issued a 2024 Guidance Note requiring all Tier 2 Microfinance Service Providers in Mainland Tanzania to notify the regulator of their digital lending platforms within fourteen days. Providers must secure a no-objection letter within thirty days to continue existing digital loans, onboard new customers without interruption, and consolidate multiple platforms into a single system while informing affected clients. Failure to comply or operate unlicensed platforms will result in the suspension of lending activities, and discontinued platforms must be closed before the moratorium period expires.
1 2 Mirambo Street, P. O. Box 2939, 11884 Dar es Salaam – Tanzania Email: info@bot.go.tz Website: www.bot.go.tz, Telephone: +255 22 223 2000/3000/3215/5483/5531/5586 In reply please quote: Ref. No. FA.377/433/01/486 27 th August, 2024 To: All Tier 2 Microfinance Service Providers RE: PUBLICATION OF GUIDANCE NOTE ON DIGITAL LENDERS UNDER TIER 2 MICROFINANCE SERVICE PROVIDERS, 2024 Reference is made to the captioned subject. 2. Pursuant to the provisions of Section 12(3) of the Microfinance Act, 2018, the Bank of Tanzania has issued the Guidance Note on Digital Lenders Under Tier 2 Microfinance Service Providers, 2024. 3. The Guidance Note shall apply to all Tier 2 Microfinance Service Providers operating in Mainland Tanzania, and the effective date of the Guidance Note shall be 27 th August 2024. 4. A microfinance service provider shall notify the Bank of Tanzania of all digital lending platforms they operate in the market within 14 days from the issuance date of the Guidance Note. Further, the Bank of Tanzania will suspend all lending platforms operated by unlicensed Microfinance Service Providers and those who fail to notify the Bank within the deadline. 5. All microfinance service providers with existing digital loan products and services before the issuance of the Guidance Note are directed to comply with the following within 30 days: (a) To seek and obtain a no-objection letter from the Bank of Tanzania in line with the criteria provided in the Guidance Note in order to continue offering digital loan products and services. THE UNITED REPUBLIC OF TANZANIA BANK OF TANZANIA
2 2 Mirambo Street, P. O. Box 2939, 11884 Dar es Salaam – Tanzania Email: info@bot.go.tz Website: www.bot.go.tz, Telephone: +255 22 223 2000/3000/3215/5483/5531/5586 (b) A microfinance service provider shall not onboard new loans without obtaining a no-objection letter from the Bank of Tanzania to offer digital loan products and services. (c) In cases where a microfinance service provider operates more than one digital lending platform (Mobile Application, Website or another platform), the microfinance service provider shall establish a mechanism to migrate all customer data and credit relationships into a single digital lending platform, which will be submitted to the Bank for the request of a no-objection letter. The microfinance service provider must ensure that customers are informed of this exercise. (d) A microfinance service provider shall notify the Bank of Tanzania of all digital lending platform(s) which has been discontinued following a migration of customer data and credit relationships and shall ensure these platforms are closed immediately before the end of the moratorium period. 6. Kindly note that the Guidance Note has been published on the website of the Bank and can be accessed at: https://www.bot.go.tz. Yours sincerely, Emmanuel M. Tutuba GOVERNOR
3 2 Mirambo Street, P. O. Box 2939, 11884 Dar es Salaam – Tanzania Email: info@bot.go.tz Website: www.bot.go.tz, Telephone: +255 22 223 2000/3000/3215/5483/5531/5586 c.c: Executive Secretary, Tanzania Microfinance Associations (TAMFI), 54A Uporoto Street, P. O. Box 950, DAR ES SALAAM. c.c: General Secretary, Tanzania Microfinance Union (TAMIU), P. O. Box 2547, MOROGORO.