Tanzania's Ministry of Finance, working with the Bank of Tanzania (BoT) and other public and private financial institutions, delivered financial literacy training in Butiama district and urged borrowers not to use family property as collateral without the affected family’s consent to avoid disputes if the loan cannot be repaid. BoT’s senior legal officer Ramadhani Myonga also urged financial institutions to follow applicable laws and procedures before accepting family assets as security, including ensuring ownership documents and written family consents are provided. The training highlighted risks for loan guarantors, noting that a guarantor may be required to repay the full loan if the borrower defaults, and encouraged community groups to manage their projects to generate profits that can support internal lending and reduce reliance on high-interest loans.
Ministry of Finance (Tanzania) 2025-03-19
Tanzania's Ministry of Finance and Bank of Tanzania warn against pledging family assets as loan collateral without written consent
Tanzania's Ministry of Finance, with the Bank of Tanzania and other institutions, conducted financial literacy training in Butiama, stressing family consent before using family property as collateral. BoT's senior legal officer emphasized legal adherence when accepting family assets as security. The training also addressed risks for loan guarantors and encouraged community groups to generate profits to reduce reliance on high-interest loans.