Africa-Press – Tanzania. THREE commercial banks yesterday signed agreements with 10 councils to facilitate the provision of interestfree loans to youth, women and people with disabilities (PWDs) in the country.
Speaking at the signing ceremony in Dodoma, Minister of State in the President’s Office (Regional Administration and Local Government–PO-RALG), Mohamed Mchengerwa (pictured) said the government plans to disburse a total of 234bn/- to economically empower Tanzanians across the country.
Of this amount, which will be released under improved arrangements through selected banks, 164bn/- will be allocated to financial institutions, while the remaining 70bn/- will be revolving funds.
The three banks involved in the strategic empowerment programme are NMB, CRDB and Uchumi Commercial Bank (UCB).
The interest-free loans were suspended in April, 2023 to allow for a review and improvement of the disbursement process following findings from the 2021/22 report by the Controller and Auditor General (CAG).
Deputy Minister of State in the President’s Office (Regional Administration and Local Government), Dr Festo Dugange told MPs in November, last year that the government had already revised the relevant laws and regulations to ensure a more efficient and transparent loan disbursement system.
He said the 2024 regulations had been introduced, ensuring a structured approach to loan disbursement. The deputy minister said the new system is set to address the challenges that led to the suspension of the loans. In July last year, the loan disbursement began through selected banks for 10 pilot councils.
The councils include Dar es Salaam, Dodoma, Kigoma Ujiji, Songea and the towns of Newala and Mbulu, as well as the districts of Siha, Nkasi, Itilima and Bumbuli. Yesterday, the government an signed agreement with three bank to ensure the issuance of loans to targeted groups in the 10 selected council.
Mr Mchengerwa said NMB will release the funds to women, youth and PWDs in five councils, namely Bumbuli, Itilima, Newala, Songea and Dodoma Municipality. He added that CRDB will operate in Nkasi, Mbulu, Kigoma and Dar es Salaam while Uchumi Commercial Bank will issue loans in Siha District Council.
“This is in line with President Samia Suluhu Hassan’s directives on government’s commitment to ensure all groups are involved in economic growth by allocating 10 percent from councils ‘revenues. This is also stipulated in the ruling-CCM’s 2020-2025 election manifesto,” he said.
The Minister noted that previous challenges in loan disbursement led to the suspension of the program by the President, pending the development of a more efficient and transparent system by PO-RALG. He added: “We are here today because some people misused these funds.
This time around, I am taking full responsibility. I have assured the President that I will oversee the process. This also involves regional commissioners, district commissioners, directors and mayors.”
He further instructed all executives to ensure that loans are not issued to ghost individuals or groups. On his part, the representative of CRDB’s Chief Executive Officer, Ms Tully Mwampamba commended the government for selecting the bank, pledging to serve the designated groups.
She explained that CRDB had already issued a cumulative total of 2.9 tri/- in loans to special groups, including women, youth and PWD and that CRDB’s staff have already been trained to successful take up the programme.
Uchumi Commercial Bank Chief Executive Officer, Samuel Wado said his bank is well equipped to provide quality services as directed by the government.
He said since its establishment in 2005, UCB has been cooperating with the government to promote economic development, particularly in the agriculture sector.
A representative from NMB Bank reaffirmed the institution’s commitment to educating the targeted beneficiaries before disbursing the loans to ensure they are wellprepared for the financial support.
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