The Central Bank of Tanzania (BoT) has issued a stern warning to unlicensed financial institutions, companies, and individuals engaged in lending activities, emphasizing that strict measures will be taken against those who violate laws, regulations, and guidelines.
In a statement released by the lender of last resort, it was highlighted that violators of financial regulations could face severe consequences, including a fine of up to 20 million Tanzanian Shillings and a two-year prison term.
The statement further revealed that the BoT has identified institutions, companies, and individuals who are breaching financial regulations. It serves as a reminder to all licensed small financial service providers to adhere to the laws, regulations, and guidelines governing lending practices. These providers are urged to provide borrowers with clear loan contracts that outline the applicable interest rates based on the loan policy. It is also stressed that interest should be calculated on a monthly basis, following the specified guidelines.
Furthermore, the Bank of Tanzania urged citizens to exercise caution and refrain from borrowing or conducting business with unlicensed financial institutions, companies, or individuals. This advisory is aimed at safeguarding individuals from potential risks associated with engaging in financial transactions with unauthorized entities.
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