Tanzania Urges Loan Education Before Borrowing

Financial Institutions Urged to Educate Borrowers Before Lending

Mwanza, March 28, 2025

The government has called on financial institutions across Tanzania to provide comprehensive education to borrowers before extending loans, ensuring they understand loan conditions, interest rates, additional charges, and the consequences of late repayment.

Senior Legal Officer in the Department of Financial Inclusion and Welfare Services at the Bank of Tanzania (BoT), Ramadhani Myonga, emphasized this during a financial literacy training session organized by the Ministry of Finance and its affiliated agencies. The session was held for residents of Buchosa District Council in Sengerema, Mwanza Region.

Myonga underscored the importance of equipping borrowers with accurate information and relevant training prior to signing any loan agreements. This, he said, would help individuals make informed financial decisions and avoid exploitative lending practices.

"The government remains committed to developing policies and frameworks that safeguard borrowers from financial exploitation and promote access to affordable credit for sustainable economic growth," Myonga stated.

He further highlighted that transparency in the lending process, coupled with adequate borrower education, would reduce instances of financial abuse and empower citizens to manage credit responsibly.

On her part, Grace Machunda, the Development Officer for Buchosa District Council in Sengerema, encouraged local group members across the country to register their groups. This, she explained, would enable them to access government loans and benefit from legal support in case of group-related challenges.

One of the participants, Musa Kilaba, a resident of Buchosa, urged his fellow trainees to apply the knowledge gained during the session. He also recommended that the government expand financial literacy seminars to all levels nationwide and increase the number of educators to reach more citizens effectively.

Another participant, Laurencia Msabi from Buchosa, pledged to become a financial literacy ambassador within her community and among the groups she belongs to.