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The BANK of Tanzania (BoT) has stated that it does not intend to close or restrict village community banks (VICOBA) and other microfinance institutions while it is preparing regulations for service providers. microfinance.
In the clarifications released yesterday, the BoT stated that the goal of the law was to protect all stakeholders involved in microfinance activities, users and service providers by setting up records, transactions and actions. leadership.
"The BoT does not intend to close or restrict community groups offering microfinance services such as VICOBA (village community banks), individuals and small businesses in contrast to the false information circulating on the social media, "said Victor Tarimu, director of Small Scale Money Services.
The bank will take tough measures against individuals, companies and institutions that divulge false information and fear that the public will close or block microfinance activities.
Last December, the BoT issued a notice stating that it was preparing regulations for different categories of microfinance service providers identified in the 2018 Microfinance Law and for licensing purposes.
Section 12 of the law, among others, mandates the Bank of Tanzania to authorize, regulate and supervise microfinance activities in mainland Tanzania.
Article 16 of the law prohibits any person from carrying on a microfinance activity unless it is approved by the Bank of Tanzania.
Sanctions applicable in case of violation of this article are also provided for in the law.
The notification required all microfinance institutions to submit all required information regarding their operations by Friday at the latest.
However, last Friday, the Bank revised the notice to extend the deadline for submitting information before the end of the month and exempted SACCOS from complying with this notice.
The Bank also stated that the law was intended to protect stakeholders from risks that could result from financial activities such as money laundering and theft.
"The central bank is aware of unregistered individuals, institutions and groups dealing with monetary matters.
The law provides for a one-year transition period, at the time of enactment of the regulations, to ensure that service providers finish their registration, "the statement said.
During the transition period, service providers can continue to offer their services without fully registering.
BoT added that all stakeholders would fully participate in the development of the regulation.
The Bank is currently preparing regulations for the different categories of microfinance service providers identified in the law, including licensing regulations.
All persons carrying out microfinance activities will need to obtain an official license from the Bank of Tanzania and comply with the other requirements of the Regulation, once published and published in the Government Gazette.
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