The Bank of Tanzania (BoT) has ordered all deposit-taking Microfinance institutions to set up a mechanism that will resolve consumer complaints within two weeks.
The move is part of the several measures being taken to regulate the financial sector after several insitutions were mismanaged. This is in accordance with Regulation No. 54 of the regulations that govern microfinance service providers.
The directives have started with effect from May 22, 2020. The move comes in after the central bank received a number of com- plaints raised against the services of micro-finance institutions include mishandling, overcharging interest rate, unnecessary account deducting, delays in loan processing and failure by lenders to provide loan agreements to clients.
“We have also ordered that the report on com- plaints should include consumers name, telephone numbers, residence (region, district and branch), the amount of loan issued, the date of loan issuance, interest rate, other charges, the rate of installment and the amount repaid,’’ said Victor Tarimu, Manager, Microfinance Banks and Bureau de Change Supervision at BoT.
‘’Others the maturity period of the loan, the nature of the complaint, the date of creditor received complaints and the action taken by the institution,” he added.
Tarimu also directed microfinance institutions to resolve the disputed complaints within three weeks with effect from May 22, 2020 and submit to the BoT together with the reasons for the failure to resolve.
The central bank emphasised the significance of microfinance institutions to obey to Microfinance Services Act, 2018 which came into effect on November 1, 2019 as they continue with processing of licensing process at BoT.
The central bank has threatened to take punitive legal actions, including shutting down business of microfinance entities that will violate the said directives.
It has called on micro- finance consumers with complaints in the country to submit their complaints in writing to the lenders.
Tarimu explained that the copy of the document should be submitted to the central bank Director of Banking Supervision at the head office.