AfricaPress-Tanzania: FAIDIKA Microfinance Tanzania has launched a new loan buyback scheme to expand choices for loan repayments to bank borrowers.
The firm’s Chief Executive Officer, Mr Baraka Munisi, said government employees with loans from other banks and financial institutions were qualified to access loans under the newly established scheme that offers low interest rates and longer repayment tenure.
He said Faidika would buy back loans with higher interest rates and provide more affordable rates and a longer repayment period.
“We have decided to give Tanzanians this opportunity which to a large extent is to relieve them with high interest rates charged by other financial institutions in the country,” said Mr Munisi.
“We have decided to offer an opportunity of acquiring a loan at an affordable rate to every civil servant who is being charged a high rate. Faidika is one of the microfinance which offers low interest rate with longer repayment period in the country as compared to other lenders.”
Mr Munisi said Faidika Microfinance issues loans ranging from 200,000/- to 70m/- and with repayment period of between six to 84 months.
Microfinance sector in Tanzania has recently experienced tremendous growth thanks to a supportive legal and regulatory framework, conducive macro-economic environment and innovation in digital finance platforms.
The sector is dominated by the banking sub sector, which contributes about 70 per cent of the total assets, while insurance, pensions and securities account for the remaining 30 per cent, according to FinScope Tanzania 2017 data.
Access to financial services has improved dramatically in recent years as a result of rapid adoption and usage of electronic platforms offering financial services, mostly mobile money services; a flexible regulatory environment and massive investments by the private sector in distribution ecosystems and promotion.
However, despite these achievements, the level of financial exclusion is still high, at 28 per cent, with the majority of those excluded being people living in rural areas, smallholder farmers, youth and women, the FinScope Tanzania 2017 report shows.