Over 800,000 listed by credit reference bureaux

Some 820,000 Tanzanians have so far been registered by two credit reference bureaux which have been licensed to operate by the Bank of Tanzania (BoT), it has been learned.

Finance Minister, Ms Saada Mkuya Salum, (pictured) said the bureaux stored data of potential loan seekers which helped financial institutions track their creditworthiness when seeking loan facilities.

The minister made the remarks while reacting to contributions from lawmakers who debated annual reports tabled in the House by the Parliamentary Committee on Economy, Industry and Trade on Wednesday.

Presenting the report earlier, the committee chairman, Mr Luhaga Mpina (Kisesa- CCM), had raised concern about high interest rates charged by financial institutions, which made the majority of people shy away from credit facilities.

Mr Mpina noted that banks imposed lending rates of between 15 and 21 per cent while customers depositing money in the institutions enjoyed deposit rates of between 2 and 5 per cent while inflation was at 4.8 per cent.

He blamed the government for the higher rates since it borrowed from both commercial banks and pension funds at rates ranging from 13.8 to 14.8 per cent.

“Banks are assured of being repaid when they lend to the government, and since rates offered by the state are impressive, they tend to be reluctant to extend loans to the private sector and individuals,” the Kisesa MP stated.

However, Ms Mkuya explained that the rates were determined by market forces and the government could hardly intervene, as by doing so it would destabilise the market. “Our financial market is still in an infant stage since hardly 14 per cent of Tanzanians have access to banking services.

The fact that many people lack collateral is another factor that makes them unable to access credit facilities,” the minister explained.

It was with this backdrop that the government was promoting microfinance institutions to enable more people access credit facilities, she added.
Source: Daily News, reported by Alvar Mwakyusa and Christopher Majaliwa from Dodoma, Tanzania

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