Tanzania: Geita issues new loan rules as repayment falls below 50%

Geita City Council has introduced new regulations to access special group loans after repayment falls below 50%.

The city council said, for example, that it granted $470 million in loans to special groups – youth, women and people with disabilities (PLWD) – but repayment was only $200 million, less than half between last July and March.

Thus, borrowers under the new guidelines for special groups must produce two guarantors who would be liable if a group fails to repay the loan.

Geita City Council Youth Development Officer Zengo Pole said the new guidance and management system for monitoring and evaluation of returns is in place from yesterday during the presentation of a check for 200 m/- for 33 groups.

“The council is reviewing regulations after granting a number of loans, but repayment has been slow and a big challenge….

“The council this way ends up wasting a lot of money that was supposed to go to others under the special groups,” Mr. Zengo said.

Mr Zengo said the experience and difficulties in loan repayment had opened the council’s eyes, thus revamping monitoring systems by cooperating with all ward and council development officers while streamlining its efforts for borrowers .

Loans to 33 groups met the group specific borrowing criteria for the third quarter of fiscal year 2021/2022. The groups were of 15 young people, 16 women and two handicapped. The 200m/- was part of 10 per cent of the council’s income for that fiscal year.

Other measures to protect council funds include bringing in experts from various sectors, including veterinary, business and agriculture, who will provide business and financial training, among other methods.

“Our policy is that when a group repays the loan in a timely manner, it warrants an opportunity to apply for another loan of a large amount,” he said.

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