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Tanzania: lending & credit regulation

Regulated

Tanzania lending regulated under Microfinance Act 2018; BoT oversees Tier 2 digital lenders

Lead regulator:
Bank of Tanzania
Key law:
Microfinance Act 2018
Last updated:
2026-07-12

The lending and consumer credit sector in Tanzania is regulated under the Microfinance Act 2018, which establishes a four-tier framework for microfinance service providers. The Bank of Tanzania serves as the primary supervisor for Tier 2 providers, which include private lenders and digital lenders, requiring them to hold specific licenses and meet capital thresholds.

Recent regulatory focus has intensified on digital lending, with the Bank of Tanzania issuing guidance in 2024 mandating that Tier 2 providers notify the regulator of their digital platforms and obtain no-objection letters to continue operations. This oversight is supported by strict eligibility criteria, capital requirements (e.g., TZS 20 million for individual money lenders), and operational standards for transparency and data protection.

In Zanzibar, a separate but parallel framework exists for Tier 3 providers (SACCOS) under the 2025 Zanzibar Microfinance Service Regulations, while mainland mortgage and development finance activities are governed by specific amendments to the Banking and Financial Institutions Act.

Who regulates

  • Bank of Tanzania

    Primary supervisor for Tier 2 microfinance service providers (including digital lenders) and issuer of prudential regulations for banks and financial institutions.

    [1][2][3]

  • Zanzibar Minister of State for Finance and Planning

    Issuer of regulations for Tier 3 microfinance service providers (SACCOS) in Zanzibar.

    [4]

Core laws & rules

  • Microfinance Act (2018)

    Establishes a comprehensive four-tier regulatory framework for microfinance service providers, mandating licensing, registration, and supervision by the Bank of Tanzania and delegated authorities.

    [1]

  • Banking and Financial Institutions Act (Undated (referenced in 2023/2022 regulations))

    Provides the statutory basis for the Governor to issue regulations governing mortgage refinance, development finance, and financial leasing activities.

    [5][6][7]

  • Zanzibar Microfinance Service Regulations (2025)

    Establishes a regulatory framework for Tier 3 microfinance service providers (SACCOS) in Zanzibar, including tiered licensing and capital thresholds.

    [4]

Licensing & registration

  • Tier 2 Microfinance Service Provider (Individual Money Lender)

    Requires registration with the Bank of Tanzania, submission of certified business documents, audited financial statements, and compliance with capital and operational standards. Capital: TZS 20,000,000 Timeline: Application fee of TZS 300,000; digital lenders must notify BoT within 14 days and secure no-objection letter within 30 days (2024 Guidance).

    [8][2]

  • Tier 3 Microfinance Service Provider (SACCO)

    Governs Savings and Credit Cooperative Societies in Zanzibar with distinct capital thresholds and structured governance requirements. Capital: Not specified in summary Timeline: Under 2025 Regulations

    [4]

  • Mortgage Refinance Company

    Requires licensing under the Banking and Financial Institutions Act with strict collateralization standards and core capital mandates. Capital: TZS 30,000,000,000 Timeline: 2022 Regulations; amended 2023

    [9][5]

  • Development Finance Institution

    Requires comprehensive licensing, organizational structure, and capital requirements for institutions providing development finance. Capital: TZS 200,000,000,000 Timeline: 2021 Regulations; amended 2023

    [10][6]

Restrictions & warnings

  • Digital lenders must operate on secure platforms with transparent pricing, full data protection, and must obtain a no-objection letter from the Bank of Tanzania to continue existing digital lending operations.

    [11][2]

  • Banks and financial institutions are prohibited from using telecommunication licenses as loan collateral due to transferability restrictions under the Electronic and Postal Communications Act, 2010.

    [12]

  • Single borrower exposures for banks are capped at five to twenty-five percent of core capital, with aggregate large exposure limits set at eighty percent of core capital.

Direction of travel

  • Regulatory oversight of digital lending is tightening, with the Bank of Tanzania enforcing strict notification and no-objection requirements for Tier 2 providers to ensure operational stability and consumer protection.

    [2]

  • The introduction of the 2025 Zanzibar Microfinance Service Regulations indicates a continued effort to formalize and regulate microfinance activities across all jurisdictions within Tanzania.

    [4]

Sources

  1. The Microfinance Act 2018 · 2018-01-01
  2. Guidance Note on Digital Lenders Under Tier 2 Microfinance Service Providers, 2024 · 2024-01-01
  3. Microfinance Regulations for Non-Deposit-Taking Service Providers 2019 · 2019-01-01
  4. Zanzibar Microfinance Service (Savings and Credit Cooperative Societies) Regulations, 2025 · 2025-01-01
  5. Banking and Financial Institutions (Mortgage Refinance Companies) (Amendment) Regulations, 2023 · 2023-01-01
  6. Banking and Financial Institutions (Development Finance) (Amendment) Regulations 2023 · 2023-01-01
  7. The Banking and Financial Institutions (Financial Leasing) Regulations, 2022 · 2022-01-01
  8. Tier 2 Microfinance Service Providers (Individual Money Lenders) · 2020-03-17
  9. The Banking and Financial Institutions (Mortgage Refinance Companies) Regulations 2022 · 2022-01-01
  10. The Banking and Financial Institutions (Development Finance) Regulations, 2021 · 2021-01-01
  11. Guidance Note on Digital Lenders Under Tier 2 Microfinance Service Providers, 2024 · 2024-01-01
  12. Use of Telecommunication Licenses as Collateral · 2020-01-01

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This guide is compiled automatically from 12 primary-source documents published by Tanzania's regulators, reviewed by RegAlert, and refreshed monthly (last updated 2026-07-12). It is not legal advice — always confirm requirements with the regulator or local counsel before acting.