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Tanzania Act or statute

Parliament of Tanzania

The Microfinance Act, 2018

This section gives the Act its short title and lets the Minister set its commencement date by Gazette notice. This Act applies to Mainland Tanzania. This section defines key terms used in the Micr…

accountingaccounts auditaccounts preparationadministrative lawamendmentappeal processappealsapplication processingauditor requirementsbusiness authorisationbusiness premisesbusiness transformationcapital/liquidity requirementcertificate of registrationcollectionscomplaints handlingcompliancecompliance enforcementcompliance oversightconsumer protectionconsumer protection principlescontract obligationscontract vettingcooperative societiescorporate liabilitycredit informationcredit information sharingcredit reference bureau reportingcredit termscross-referencedefinitionsdigital microfinancedigital paymentsdisclosuredispute resolutiondividendsEmployment lawentity classificationfeesfinancial educationfinancial institutionsfinancial recordsfinancial regulationfinancial reportingfinancial statement disclosureforeign-owned businessesgeneral penaltygood faithinformation requestsinspectioninstitution tiersinstitutional supportinstitutional transformationinterest on noncomplianceinterest paymentsinterest ratesinternal auditinternal controlinternal controlslegal capacitylegislation commencementlendingliabilitylicence applicationslicence revocationBusiness registrationliquid assetsloanslocal governmentmanagement takeovermicrofinancemicrofinance businessmicrofinance compliancemicrofinance licensingmicrofinance operations managementmicrofinance registrationmicrofinance regulationmicrofinance service provider governancemicrofinance service providersmicrofinance supervisionminimum capital requirementsministerial supervisionmonitoring and complianceoffence compoundingoffencesofficers and agentspenaltiesperiodic reportingpermitted and prohibited activitiespolicypublic noticepublication requirementsreapplicationrefusal decisionsregistersregistrationregistration cancellationregulatory approvalregulatory complianceregulatory delegationregulatory directivesregulatory inspectionregulatory inspectionsregulatory refusalregulatory registerregulatory reviewregulatory scoperegulatory supervisionscope of applicationservice provider complianceservice provider registrationstatutory amendmentstatutory interpretationsupervisionsuspicious transaction reportingtrainingtransitional provisionswritten notice
Jurisdiction
Tanzania
Structure
69 provisions
Citation
The Microfinance Act, 2018
Dates
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01

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“This section gives the Act its short title and lets the Minister set its commencement date by Gazette notice.”

This section gives the Act its short title and lets the Minister set its commencement date by Gazette notice. This Act applies to Mainland Tanzania. This section defines key terms used in the Microfinance Act, including the Bank, microfinance service provider, consumer, and several types of microfinance activities and institutions. Microfinance business must be carried out by microfinance service providers that are established and recognized under the Act, and it must be done in line with the Act. This section creates four tiers of microfinance service providers and says deposit-taking microfinance institutions are regulated under the Banking and Financial Institutions Act.

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Short title and commencement

This section gives the Act its short title and lets the Minister set its commencement date by Gazette notice.

Section 1

18

A person intending to do Tier 2 microfinance business must apply to the Bank for a licence and submit the required form, details, fee, and documents.

Section 17

Debts collection and recovery

Microfinance debts must be collected under the regulations, with written notice first, sale of attached property only as a last resort, and a reasonable notice period before sale or disposal.

Section 51

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Showing 69 of 69 provisions

Provision 50Offence 8Amendment 7Commencement 2

Part

PART I

§ 1Short title and commencementShort title

This section gives the Act its short title and lets the Minister set its commencement date by Gazette notice.

1. This Act may be cited as the Microfinance Act, 2018 and shall come into operation on such date as the Minister may, by notice published in the Gazette, appoint. Application
Section 1Verify source
§ 23Interpretation

This Act applies to Mainland Tanzania.

2. This Act shall apply to Mainland Tanzania. Interpretation
Section 2Verify source
§ 3ApplicationProvision

This section defines key terms used in the Microfinance Act, including the Bank, microfinance service provider, consumer, and several types of microfinance activities and institutions.

3. In this Act, unless the context otherwise requires- 6 7 No. 10 Microfinance Act 2018 “Bank” means the Bank of Tanzania; “Community microfinance to under this Act group” means group collectively formed and managed by members and undertake registered microfinance business including mobilization of savings from its members and provision of loans to its members but does not include:- (a) community self help groups formed for safety- net purposes and socio-economic welfare of members and which do not receive savings and provide loans to its members for the purpose of undertaking microfinance business; Cap.337 Cap. 212 Cap. 211 financial contributions (b) special interest groups, clubs and associations collecting from members or receiving charity donation formed and registered under the Societies Act for enhancement of their economic social welfare but does not undertake microfinance business; and (c) groups occasionally formed for the purpose of receiving donations or fund raising for religion purposes or social events including marriages or other customary family related affairs by individuals or groups; “credit company” means a company duly incorporated to the Companies Act and under undertake microfinance business under this Act; licensed “credit reference bureau” means an entity specialized in sale of credit performance collecting and information for individuals and entities. “Commission” means the Tanzania Cooperative Development Commission established under the Cooperative Societies Act; “commodity microfinance” means the undertaking of microfinance business in the form of commodity; 7 No. 10 Microfinance Act 2018 8 “consumer” means a client or member of a microfinance service provider who acquires or intends to acquire the services of the microfinance service provider; “Delegated Authority” means a public institution delegated by the Bank the mandate to execute the functions and powers of the Bank under this Act; “entity” means a corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated organisation or any other form of undertaking that is not specifically listed herein but that is commonly recognised as an entity; and, includes any Government or government agency or institution; “financial organisation” means an organisation duly incorporated or registered under relevant laws and which to undertake microfinance business in accordance with this Act; licensed is “foreign owned microfinance service provider” means a microfinance service provider incorporated in Tanzania and whose majority owners or shareholders are foreigners; “individual money lender” means a person licensed to undertake microfinance business of lending money to individuals in accordance with the provisions of this Act; “microfinance business” means the deposit and non- deposit taking business and includes the activities stipulated under section 4; “micro leasing” means finance leasing operations where the average value of the asset in the portfolio is up to ten million Tanzanian shillings and the leasing term does not exceed twenty four months; “microloan” means a loan provided to small enterprises, household and individuals as determined in the regulations; 8 9 No. 10 Microfinance Act 2018 Cap 394 “micro insurance” has the meaning ascribed to it under the Insurance Act; Cap. 423 Cap 211 Microfinance business licenced registered or “microfinance service provider” means an entity or a to undertake person microfinance business under this Act including deposit and non-deposit taking microfinance service providers as classified under section 5; “Minister” means the Minister responsible for finance; “money laundering” has the meaning ascribed to it under the Anti Money Laundering Act; “place of business” means a branch, office, agency or mobile unit of a microfinance service provider open to the public; "Register" means a register of microfinance service providers referred to under section 54;and “SACCOS” has the meaning ascribed to it under the Cooperative Societies Act. PART II MICROFINANCE SERVICE PROVIDERS
Section 3Verify source

Part

PART II

§ 45Provision

Microfinance business must be carried out by microfinance service providers that are established and recognized under the Act, and it must be done in line with the Act.

4.-(1) The microfinance business shall be undertaken by microfinance service providers which are - (a) established in terms of their respective laws and recognized under this Act; and (b) established and recognized under this Act. (2) The microfinance service providers under sub- section (1) shall undertake microfinance business in accordance with the provisions of this Act. 10 (3) Without prejudice to the generality of sub section (2), the microfinance business undertaken under this Act shall include- (a) receiving money, by way of deposits or interest on deposits or borrowing and which is lent to members or clients; 9 No. 10 Microfinance Act 2018 (b) accepting savings and providing loans or other credit facilities to micro or small enterprises and low income households or individuals; (c) providing micro credit, micro savings, micro- insurance, micro-leasing, micro-pension and micro-housing finance; (d) transfer and payment services, digital microfinance services; including (e) undertaking commodity microfinance business including provision of commodity loans; (f) providing financial education; and (g) any other related service as may be prescribed in the regulations. Categorization of microfinance service providers
Section 4Verify source
§ 56Provision

This section creates four tiers of microfinance service providers and says deposit-taking microfinance institutions are regulated under the Banking and Financial Institutions Act.

5.-(1) For the purpose of this Act, there shall be four tiers of microfinance service providers as follows: (a) Tier 1, shall comprise of deposit taking microfinance service institutions; (b) Tier 2, shall comprise of non-deposit taking such as service providers microfinance individual money lenders; Cap.342 1 Place of business (c) Tier 3, shall comprise of SACCOS; and (d) Tier 4, shall comprise of community microfinance groups. (2) Deposit taking microfinance institutions under sub-clause 1(a) shall be regulated in accordance with the Banking and Financial Institutions Act.
Section 5Verify source
§ 67Offence

Microfinance service providers must have business premises with a proper address, and they must not open or close a place of business without prior approval from the Bank or Delegated Authority.

6.-(1) Each microfinance service provider shall have a place or places of business with proper address for carrying out its microfinance business. (2) Subject to this section, a microfinance service provider shall not open or close a place of business without the prior approval of the Bank or Delegated Authority. 10 No. 10 Microfinance Act 2018 Governance of microfinance service providers (3) A microfinance service provider which fails to comply with the requirements of this section, commits an offence.
Section 6Verify source
§ 78Provision

Microfinance service providers must follow their own establishing laws or constitutions, and the Bank or Delegated Authority may issue directives they must comply with if operations are not compatible with microfinance business.

7.-(1) The governance of the microfinance service providers shall be as provided for in their respective establishing laws or constitutions. (2) Notwithstanding subsection (1), the Bank or Delegated Authority may, if it is satisfied that the operations of a microfinance service provider is not in compatible with microfinance business, issue general or specific directives to the microfinance service provider regarding its operations and such directives shall be complied. Accountability of microfinance service providers
Section 7Verify source
§ 89Provision

A microfinance service provider must be accountable to the Bank, a Delegated Authority, or any other authority when undertaking microfinance business.

8. A microfinance service provider shall, for the purposes of undertaking microfinance business, be accountable to the Bank, Delegated Authority or any other authority in accordance with the applicable laws. Minimum capital requirements Minimum liquid assets
Section 8Verify source
§ 910. Minimum liquid assetsProvision

A microfinance service provider that carries on microfinance business under this Act must comply with the minimum capital requirements set out in the regulations.

9. A microfinance service provider who undertakes microfinance business under this Act shall comply with the minimum capital requirements prescribed in the regulations.
Section 9Verify source
§ 10Minimum liquid assetsProvision

A microfinance service provider must keep at least the minimum liquid assets required by regulation.

10.-(1) A microfinance service provider shall maintain such minimum holding of liquid assets as may be prescribed in the regulations. means- (2) For the purposes of this section, “liquid assets” 12 (a) notes and coins which are legal tender in the United Republic; (b) balances held at banks or microfinance service providers; (c) treasury bills and bonds which are freely 11 No. 10 Microfinance Act 2018 Transformation of microfinance service providers 13 marketable and re-discountable at the Bank; or (d) such other assets as the Bank or Delegated Authority may specify.
Section 10Verify source
§ 11Transformation of microfinance service providersProvision

A microfinance service provider may apply to change from one tier to another if it meets the required regulatory criteria. The Bank may assess sustainability first and may direct the transformation with conditions.

11.-(1) Any microfinance service provider may, upon application and attaining the required criteria prescribed in the regulations, transform from its respective Tier to another Tier. (2) Where a microfinance service provider transforms to another tier, such microfinance service provider shall be regulated in accordance with the laws governing the respective tier and this Act. (3) For the purposes of this section, the criteria for transformation of a microfinance service provider shall include- (a) minimum capital requirement for transformation; (b) number of members and customers that qualifies for transformation; (c) nature of microfinance service business that may transform; and (d) any other relevant criteria prescribed in the regulations. (4) Notwithstanding the provisions of this section, the Bank may, prior to directing transformation of microfinance service provider, conduct an assessment regarding sustainability of microfinance service provider after transformation. (5) Where upon assessment, the Bank is satisfied that a microfinance service provider meets the criteria for transformation, it may direct transformation of such microfinance service provider upon such terms and conditions as may be prescribed by the Bank. (6) Where a microfinance service provider without reasonable cause, fails to comply with the 12 No. 10 Microfinance Act 2018 Functions of Bank directive issued under sub section (5), the Bank shall take such measures as may be appropriate to ensure compliance. PART III ADMINISTRATIVE PROVISIONS
Section 11Verify source

Part

PART III

§ 1213Provision

The Bank must oversee, regulate, and supervise microfinance service providers and microfinance business, and it has specific functions like licensing, guidance, monitoring, and complaints management.

12.-(1) The Bank shall be responsible to oversee and monitor microfinance service providers operating or undertaking microfinance business in terms of this Act. (2) Subject to subsection (1) the functions of the Bank shall be to regulate and supervise the operations of microfinance business in accordance with this Act and other relevant laws. (3) Without prejudice to the generality of sub sections (1) and (2), the Bank shall in particular- (a) issue licence to qualified microfinance service providers in accordance with this Act; (b) advise and report to the Minister on matters relating to microfinance business; (c) develop and manage database for microfinance service providers; (d) inspect, monitor and evaluate the performance of microfinance business; (e) issue circulars and guidelines for microfinance services providers; (f) assess and issue approvals for transformation 14 (g) ensure proper management of complaints of microfinance service providers; relating to microfinance business; (h) ensure protection of service providers microfinance sanctioning usurious lending practices; consumers of including (i) ensure that credit microfinance disseminated and shared; and business information relating are to collected, 13 No. 10 Microfinance Act 2018 (j) perform such other functions as may be required for proper regulation and supervision of microfinance business. Powers of Bank
Section 12Verify source
§ 1314Provision

The Bank has powers to investigate, inspect, demand information, direct management, enter premises, open containers, and require explanations from microfinance service providers.

13. In the performance of its functions under this Act, the Bank shall have power to- (a) investigate or inquire into the operations of microfinance service providers; (b) inspect and examine books of accounts, records, returns and any other document of microfinance service providers; (c) demand for information related to the activities of microfinance service providers; (d) instruct on the proper management of microfinance service providers; (e) enter at any reasonable time, into any premises of a microfinance service provider or any premises in which it is believed, on reasonable grounds, that books of accounts, records or documents the microfinance service provider’s business are kept; in any form relating to (f) open or cause to be opened any strong room, safe or other container in which it is suspected, on reasonable grounds, that there are any securities, books of accounts, records or documents of a microfinance service provider; (g) require any officer, employee or agent of a microfinance service provider to explain or furnish information or documents concerning the provider’s microfinance management or activities; and service (h) exercise such powers as may be necessary for the better performance of its functions under this Act. 14 No. 10 Microfinance Act 2018 Delegation of powers and functions of Bank
Section 13Verify source
§ 1415Provision

The Bank may delegate some of its functions or powers by Gazette notice, subject to its prescribed conditions and procedures.

14.-(1) For the better carrying out of its regulatory and supervisory functions and powers under this Act and subject to such conditions and procedures as the Bank may specifically prescribe, the Bank may, by notice published in the Gazette, delegate any of its functions or powers: (a) in the case of functions and powers relating to microfinance service providers in Tier 3, to the Commission; and (b) in the case of functions and powers relating to microfinance service providers in Tier 4, to the local government authorities. (2) A Delegated Authority under sub section (1) shall exercise such functions and powers in accordance with the conditions, procedures and any other directives issued by the Bank from time to time. (3) Any power or function delegated under this section, when exercised or performed by a delegated authority, shall be deemed to have been exercised or performed by the Bank. (4) No delegation made under this section shall prevent the Bank from performing or exercising the powers and functions so delegated. (5) Notwithstanding (1), unless otherwise approved by the Minister, the Bank shall not delegate its functions and powers relating to regulation and supervision of microfinance service providers in Tier
Section 14Verify source
§ 23Provision

For this section, “local government authority” is defined by reference to the Local Government (District Authorities) Act and the Local Government (Urban Authorities) Act.

2. subsection (6) For the purposes of this section, the term “local government authority” has the meaning ascribed to it under the Local Government (District Authorities) Act and the Local Government (Urban Authorities) Act. Caps 287 and 288 15 No. 10 Microfinance Act 2018 Role of Minister 17
Section 2Verify source
§ 15Functions of BankProvision

The Minister must set microfinance policy, supervise implementation, promote microfinance business, and may require information or documents and make regulations after consultation.

15.-(1) The Minister shall, for the purpose of ensuring the microfinance business, formulate policy matters and supervise implementation of microfinance policy. conducive policy environment for shall- (2) For the purpose of sub-section (1), the Minister (a) enhance enabling environment to support microfinance business; (b) ensure sustainability of microfinance business; (c) issue directives the to to the Bank on the policy relating implementation of microfinance business; (d) ensure promotion of microfinance business, transparency and accountability; and (e) perform any other role for better carrying out of the provisions of this Act. (3) In performing his role under this Act, the Minister may, after consultation with relevant Ministers, require or demand information or documents relating to microfinance business from Ministries, institutions or office and such Ministry, institutions or office shall be obliged to comply. (4) The Minister may, in consultation with the Minister responsible for cooperatives or, as the case may local government be, authorities, make regulations for the better carrying out of his roles under this Act. the Minister responsible for PART IV LICENSING OF MICROFINANCE SERVICE PROVIDERS UNDER TIERS 2 AND 3 Prohibition of unlicensed
Section 15Verify source

Part

PART IV

§ 1617Offence

A person must not carry out microfinance business unless licensed under the Act.

16.-(1) Without prejudice to the provisions of 16 No. 10 Microfinance Act 2018 microfinance business section 28 of this Act, a person shall not carry out any microfinance business, unless such person is licensed in accordance with the provisions of this Act. (2) Any person who contravenes provisions of this section commits an offence and shall, upon conviction- (a) in the case of the tier 2, be liable to a fine of not less than twenty million shillings but not exceeding one hundred million shillings or to imprisonment for a term of not less than two years but not exceeding five years or to both; (b) in the case of the tier 3, be liable to a fine of not less than ten million shillings but not exceeding to imprisonment for a term of not less than two years but not exceeding five years or to both. (c) In the case of the tier 3, be liable to a fine not less to imprisonment for a term of not less than two years but not exceeding five years or to both. fifty million shillings or shillings or ten million than Application for licence under Tier 2
Section 16Verify source
§ 1718Provision

A person intending to do Tier 2 microfinance business must apply to the Bank for a licence and submit the required form, details, fee, and documents.

17.-(1) A person who to undertake microfinance business under Tier 2 shall apply to the Bank for a license in a manner as prescribed in the regulations. intends (2) An application for a licence in respect of Tier 2 shall be submitted to the Bank in the prescribed form as set out in the regulations and shall contain the particulars 18 of the applicant, the microfinance business involved, location or place of business and such other particulars as may be required for that purpose. (3) The application under subsection (1) shall be accompanied with- (a) a certified copy of a certificate of registration or incorporation issued in terms of a relevant 17 No. 10 Microfinance Act 2018 law; (b) a prescribed nonrefundable application fee; and (c) such other information or documents as the Bank may require for the purpose of the application. (4) The Bank shall make regulations prescribing procedures for application for licence and other matters relating to individual money lenders. Application for licence under Tier 3 Cap. 211
Section 17Verify source
§ 1819Provision

A person who wants to do Tier 3 microfinance business must apply for a licence from the Bank or Delegated Authority.

18.-(1) A person who to undertake microfinance business under Tier 3 shall apply to the Bank or Delegated Authority for a license in a manner as prescribed in the regulations. intends (2) An application for a licence under Tier 3 shall be submitted to the Bank or Delegated Authority in the prescribed form and shall be accompanied with- (a) a certified copy of certificate of registration issued in terms of Cooperative Societies Act; (b) a prescribed nonrefundable application fee; and (c) such other information or documents as the Bank or Delegated Authority may require for the purpose of the application for licensing. 18 19 No. 10 Microfinance Act 2018 Licencing of foreign microfinance service provider
Section 18Verify source
§ 1920. Consideration of applicationProvision

A foreign-owned microfinance service provider must apply to the Bank for a licence before undertaking microfinance business, and must follow applicable local content laws in Tanzania, including employment and training of Tanzanians.

19.-(1) A foreign owned microfinance service provider which desires to undertake microfinance business shall submit an application for a licence to the Bank. (2) Procedures for application under subsection (1) shall be prescribed in the regulations. (3) Where a foreign owned microfinance service provider undertakes microfinance business in Tanzania, such microfinance service provider shall comply with applicable laws in local content including employment and training of Tanzanians.
Section 19Verify source
§ 20Consideration of applicationProvision

After receiving an application under this Act, the Bank or Delegated Authority may consider it within the time set by the regulations.

20. Upon receipt of an application under this Act, the Bank or Delegated Authority may, within the period prescribed in the regulations, consider the application to ascertain its compliance with the prescribed requirements.
Section 20Verify source
§ 21Issuance of licenceProvision

If the Bank or Delegated Authority is satisfied that an applicant meets all licensing requirements, it must issue the license and register the provider.

21. Where the Bank or Delegated Authority is satisfied that an applicant has met all requirements for license under this Act, the Bank or Delegated Authority shall- (a) issue the license to the applicant upon such terms and conditions as the Bank or Delegated Authority may consider necessary; and Consideration of application Issuance of licence (b) register the provider in the register. licensed microfinance service Validity of licence
Section 21Verify source
§ 22Validity of licenceProvision

A licence issued under the Act takes effect when issued and remains valid unless the Bank or Delegated Authority revokes it.

22. A license issued under this Act shall have effect from the date it is issued and shall be valid unless revoked by the Bank or Delegated Authority. Refusal to issue license
Section 22Verify source
§ 23Refusal to issue licenseProvision

The Bank or Delegated Authority may refuse a licence application if the applicant has not met prescribed licensing terms or has given false or misleading information, and it must notify the applicant in writing with reasons within seven days.

23.-(1) The Bank or Delegated Authority may refuse to issue a licence where- (a) the applicant has failed to meet prescribed terms and conditions for licensing; or 19 20 No. 10 Microfinance Act 2018 Re-application and appeal Revocation of licence (b) the applicant has provided false or misleading information; (2) Where the Bank or Delegated Authority has refused to issue a licence, it shall within seven days from the date of its decision, notify the applicant in writing stating the reasons for such refusal.
Section 23Verify source
§ 24Reapplication and AppealProvision

A refused applicant may reapply after fixing the problems that led to refusal, and may appeal within 21 days through the stated review chain.

24.-(1) An applicant whose application has been refused may reapply, if the deficiencies that formed the basis for refusal of the initial application or subsequent review have been corrected or otherwise addressed. (2) The applicant who is aggrieved by the decision of the Bank or Delegated Authority under sub section (1) may, within twenty one days from the date of such decision- (a) in the case of the Delegated Authority, appeal to the Bank; or (b) in the case of the Bank, appeal to the Minister. (3) A person who is aggrieved by the decision of the Minister under this section, may seek further redress in a court of competent jurisdiction.
Section 24Verify source
§ 25Revocation of licenceProvision

The Bank or Delegated Authority may revoke a microfinance service provider’s licence by notice if specified conditions are met, and must publish the revoked provider’s name within 14 days.

25.-(1) The Bank or Delegated Authority may, by notice to the microfinance service provider, revoke a licence where the microfinance service provider:- (a) ceases to carry on microfinance business; (b) violates the terms and conditions prescribed in the licence; (c) is wound up, liquidated or otherwise dissolved; (d) is deregistered under a relevant law; or (e) has contravened the provisions of this Act. (2) The Bank or Delegated Authority shall, within fourteen days of the revocation, cause a name of a microfinance service provider whose licence has been 20 21 No. 10 Microfinance Act 2018 Procedure for revocation of licence revoked to be published in the Gazette and in the newspaper of wide public circulation.
Section 25Verify source
§ 26Procedure for revocation of licenceProvision

If a microfinance service provider defaults, the Bank or Delegated Authority may issue a written default notice, and the provider must respond in writing. If the default is not remedied or the response is unsatisfactory, the licence must be revoked.

26.-(1) Where a microfinance service provider is in default of the terms and conditions in respect of which a licence was issued, the Bank or Delegated Authority may serve on the microfinance service provider a default notice in writing specifying the nature of the default and the time within which the default has to be rectified. (2) Upon receipt of the default notice the holder shall make representation in writing to the Bank or Delegated authority regarding remedy or rectification of default. (3) Where the Microfinance service provider fails to remedy or rectify the default within the time specified in the default notice or has not made a representation satisfactory to the Bank or Delegated Authority, the Bank or Delegated Authority shall revoke the licence issued and notify in writing the microfinance service provider accordingly. (4) The microfinance service provider aggrieved by the decision of the Bank or Delegated Authority to revoke the licence, may- (a) in the case of a decision made by the Bank appeal to the Minister; and (b) in the case of a decision made by Delegated Authority appeal to the Bank. (5) A person who is aggrieved by the decision of the Minister under this section, may seek further redress in a court of competent jurisdiction. Effect of revocation of licence
Section 26Verify source
§ 27Effect of revocation of licenceProvision

If a microfinance service provider’s licence is revoked, the Bank or Delegated Authority must remove its name from the register and direct it to stop operations and resolve asset-and-liability issues within the prescribed time.

27.-(1) Where a licence of the microfinance service provider is revoked in terms of this Act, the Bank or Delegated Authority shall cause to be removed the name of the microfinance service provider from the 21 22 No. 10 Microfinance Act 2018 register and shall in writing, direct such microfinance service provider- (a) to stop its operations with effect from the date of revocation; and (b) to manage and resolve within the time as may be prescribed all issues relating to assets and liabilities regarding its consumers or members. (2) Where a microfinance service provider fails to comply with the directives issued under subsection (1), the Bank shall have powers to take such measures as may be appropriate to ensure protection of rights of consumers or members. PART V REGISTRATION OF MICROFINANCE SERVICE PROVIDERS UNDER TIER 4 Registration of microfinance service providers under Tier 4
Section 27Verify source

Part

PART V

§ 28Registration of microfinance service providers under Tier 4Provision

A Tier 4 microfinance business applicant must apply for registration to the Bank or Delegated Authority and submit the required form and supporting documents.

28.-(1) A person who to undertake microfinance business under Tier 4 shall apply for registration to the Bank or Delegated Authority in the manner as may be prescribed in the regulations. intend (2) An application for registration shall be made to the Bank or Delegated Authority in the prescribed form and shall be accompanied with: (a) two copies of the constitution duly signed by all members of the applicant; (b) members’ resolution to form and register a microfinance entity duly signed by all members; (c) proposed organizational structure and names of proposed leaders of the applicant; (d) a letter of reference from the ward or village authority introducing the applicant; and (e) any other documents or information as the 22 No. 10 Microfinance Act 2018 23 Refusal of registration under Tier 4 Certificate of registration Bank or Delegated Authority may require.
Section 28Verify source
§ 29Refusal of registration under Tier 4Provision

The Bank or Delegated Authority may refuse to register an applicant for failing registration requirements or giving false or misleading information.

29.-(1) Subject to section 28 of this Act, the Bank or Delegated Authority may refuse to register an applicant if the applicant has- (a) failed to meet prescribed requirements for registration; or (b) provided false or misleading information. (2) Where the Bank or Delegated Authority refuses to register the applicant under this section, it shall within seven days from the date of its decision, notify the applicant in writing stating the reasons for such refusal. (3) An applicant whose application has been this section may submit fresh refused pursuant application based on the reasons of refusal and such application shall be treated as a new application and shall be subjected to the same process. to (4) A person who is aggrieved by a decision under this section may- (a) in the case of a decision made by a Delegated Authority, appeal to the Bank; and (b) in the case of decision made by the Bank, appeal to the Minister.
Section 29Verify source
§ 30Certificate of registrationProvision

The Bank or Delegated Authority must issue a certificate of registration when a Tier 4 microfinance service provider is registered.

30.-(1) The Bank or Delegated Authority shall, upon registration of a microfinance service provider under Tier 4 issue to such provider a certificate of registration. (2) The certificate of registration issued under sub- section (1) shall contain- (a) the name and address of the microfinance service provider; (b) the date and validity of registration; (c) the area of operation or place of business of the microfinance service provider; and 23 24 No. 10 Microfinance Act 2018 Effect of registration (d) such terms and conditions as may be required.
Section 30Verify source
§ 31Effect of registrationOffence

Registration gives a microfinance service provider legal status to operate and carry out microfinance business, and an unregistered Tier 4 operator commits an offence.

31.-(1) A certificate of registration shall be a conclusive evidence of the microfinance service provider to operate or undertake microfinance business in terms of its constitution and this Act. (2) A registered microfinance service provider shall by virtue of its registration be a body corporate capable in its name of- (a) suing and being sued; (b) acquiring purchasing or otherwise disposing of any property, movable or immovable; (c) entering into contract; and (d) performing all acts which can be done by a body corporate and which are necessary for the proper performance of its duties and functions. (3) A person who undertakes the microfinance in business under Tier 4 without being registered accordance with this Act, commits an offence. Cancellation of certificate of registration
Section 31Verify source
§ 32Cancellation of certificate of registrationProvision

The Bank or Delegated Authority may cancel a microfinance service provider’s registration certificate if the certificate conditions are breached, the provider stops operating, or it acts against the Act or other relevant laws.

32.-(1) The Bank or Delegated Authority may cancel a certificate of registration if it is satisfied that: (a) the terms or conditions prescribed in the certificate have been violated; (b) the microfinance service provider has ceased to operate; and (c) the microfinance service provider operates contrary to this Act or other relevant laws. (2) Where a certificate of registration has been cancelled, the Bank or Delegated Authority shall- relevant microfinance (a) notify the service provider in writing stating the reasons for cancellation; (b) order such microfinance service provider to stop its operations; and 24 25 No. 10 Microfinance Act 2018 (c) remove the name of such microfinance service provider from the register. (3) The provisions of section 26 relating to procedures for revocation of licence shall apply mutatis mutandis to cancellation of certificate of registration issued under this Act. Promotion and empowerment of microfinance service providers
Section 32Verify source
§ 33Promotion and empowerment of microfinance service providersProvision

The Bank must work with the Council to support and promote Tier 4 microfinance service providers.

33.-(1) For the purpose of promoting the growth and sustainability of Microfinance Service Provider under Tier 4, the Bank shall, in collaboration with the Council- (a) provide financial education to members of microfinance service providers; (b) promote and intervene where necessary for the service of microfinance development providers; (c) protect interests and rights of members and service of microfinance beneficiaries providers; (d) provide provider support to microfinance service (e) through various government programmes; (f) perform such other functions for the purpose of promoting and empowering microfinance service providers under Tier 4. (2) In this section, “Council” means the National Economic Empowerment Council established under the National Economic Empowerment Act. Cap.386 25 No. 10 Microfinance Act 2018 PART VI MANAGEMENT AND SUPERVISION OF MICROFINANCE SERVICE PROVIDERS (a) Management of Microfinance Service Providers Management of microfinance business
Section 33Verify source

Part

PART VI

§ 34Management of microfinance businessProvision

The microfinance service provider is vested with management of its operations, finances, and business.

34. Management of operations, finances and business of a microfinance service provider shall be vested in the microfinance service provider. Management and take-over
Section 34Verify source
§ 35Management and take-overProvision

The Bank or Delegated Authority may take over a microfinance service provider’s management if listed problems exist; contracts stay binding, and takeover management costs are not borne by the Bank or Delegated Authority.

35.-(1) Without prejudice to section 34 and other relevant laws, the Bank or Delegated Authority may take over the management of the microfinance service provider where- (a) the Bank or Delegated Authority considers that a microfinance service provider is not- (i) in a sound financial condition; (ii) operating in accordance with sound administrative and accounting practices and procedures; and (iii) adhering policies; to proper risk-management (b) a microfinance service provider fails to comply requirements the minimum capital with prescribed under this Act; (c) a microfinance service provider refuses to be inspected by the Bank or Delegated Authority as required by this Act; (d) a microfinance service provider’s licence has been revoked; (e) the continuation of microfinance business is detrimental to the interests of microfinance clients; or (f) a microfinance service provider is undertaking microfinance business in a manner contrary to this 26 No. 10 Microfinance Act 2018 Act. (2) A party to a contract with a microfinance service provider shall not be relieved of his obligations on the ground that the microfinance service provider is under the management of the Bank or Delegated Authority. (3) Costs of management of a microfinance service provider during the period of take over shall not be borne by the Bank or Delegated Authority. (4) The procedures for management and take-over of a microfinance service provider under this section shall be as stipulated in the regulations.
Section 35Verify source
§ 36Prohibited and permissible activitiesProvision

Microfinance service providers must not engage in prohibited activities. The Bank may set the permitted and prohibited activities by regulation.

36.-(1) A microfinance service provider shall not engage in any prohibited activity under this Act or under any other written laws. (2) The Bank shall, through regulations prescribe permissible and prohibited activities of microfinance service providers. (3) Where a microfinance service provider without reasonable cause, fails to comply with the provisions of this section, the Bank or Delegated Authority shall take to ensure such measures as may be appropriate compliance. Prohibited and permissible activities Payment of dividends or interests
Section 36Verify source
§ 37Payment of dividends or interestsProvision

A microfinance service provider must pay dividends or interest distributions in line with the Act, other relevant laws, and its constitution or related documents.

37.-(1) A microfinance service provider shall pay dividends on its shares to its shareholders or make any other form of distribution or payment of interest to its consumers or members in accordance with the provisions of this Act and other relevant laws. (2) The payment of dividends, interest and other form of distribution under subsection (1) including the period for such payment shall be in the manner as prescribed in the constitution or other relevant documents of the microfinance service provider. 27 No. 10 Microfinance Act 2018 Books of accounts and other records Preparation of accounts Audit of accounts
Section 37Verify source
§ 38Books of accounts and other recordsProvision

A microfinance service provider must keep proper books of accounts and other records for its operations.

38. A microfinance service provider shall keep proper books of accounts and other records in relation to 28 its operations which are sufficient to show and explain its transactions and financial position.
Section 38Verify source
§ 39Preparation of accountsProvision

Microfinance service providers must prepare accounts each financial year using the prescribed standards.

39.-(1) Every microfinance service provider shall, in each financial year, prepare accounts in accordance with the prescribed standards. (2) The prescribed standards for preparation of accounts for microfinance service providers shall comply with national financial reporting standards. (3) The accounts and other financial records of a microfinance service provider shall be denominated in Tanzania shillings and shall comply with the requirements of the applicable laws.
Section 39Verify source
§ 40Audit of accountsAmendment

Microfinance service providers must have their accounts audited yearly, with Tier 4 providers handled separately under regulations.

40.-(1) The accounts of microfinance service provider except for microfinance service providers under Tier 4 shall be audited at least once in a year by an auditor in a manner provided for in the regulations. (2) Notwithstanding provisions of sub section (1), the accounts and financial records of the microfinance service providers under Tier 4 shall be audited or monitored as prescribed in the regulations. (3) Where the Bank or Delegated Authority is satisfied that the audited accounts of a microfinance service provider do not comply with the requirements of this Act or relevant regulations or contain information that may be misleading or are not published in the specified form, the Bank or Delegated Authority may require the service provider to- (a) amend the audited accounts to comply with the Act; (b) correct the misleading information; 28 No. 10 Microfinance Act 2018 Appointment of internal auditor Disclosure of financial statements (c) re-publish the amended audited accounts; and (d) submit to the Bank or Delegated Authority further documents or information relating to any document or information. (4) Where a microfinance service provider without reasonable cause, fails to comply with the provisions of this section, the Bank or Delegated Authority shall take such measures as may be appropriate to ensure compliance.
Section 40Verify source
§ 41Appointment of internal auditorProvision

A microfinance service provider must appoint an internal auditor with the qualifications and experience required by the regulations.

41.-(1) A microfinance service provider shall appoint an internal auditor who holds such qualifications and experience as prescribed in the relevant regulations. (2) Without prejudice to sub section (1), a microfinance service provider under Tier 4 shall appoint a person responsible for internal control of financial affairs of the service provider in a manner provided for in the regulations.
Section 41Verify source
§ 42Disclosure of financial statementsProvision

A microfinance service provider must disclose its financial statements and keep current audited accounts on display at its business premises; the Bank or Delegated Authority may prescribe the required form and manner, especially for Tier 4 providers.

42.-(1) A microfinance service provider shall disclose its financial statements to the Bank, Delegated Authority and other stakeholders in a manner as provided for in the regulations. (2) Without prejudice to sub section (1), a microfinance service provider shall display, throughout the year and in a conspicuous place in its place of business, a copy of its current audited financial statements, a copy of the balance sheet and profit and loss account in such form and manner as the Bank or Delegated Authority may prescribe. (3) Notwithstanding the provisions of sub section (1), the Bank or Delegated Authority may prescribe the manner in which the microfinance service providers in Tier 4 shall disclose their financial information. 29 No. 10 Microfinance Act 2018 (4) Where a microfinance service provider without reasonable cause, fails to comply with the provisions of this section, the Bank or Delegated Authority shall take 30 to ensure such measures as may be appropriate compliance. Sharing of credit information
Section 42Verify source
§ 43Sharing of credit informationProvision

Microfinance service providers must share credit information under the regulations, and Tier 2–4 providers must submit credit information to a credit reference bureau.

43.-(1) A microfinance service provider shall share credit information in a manner provided for in the regulations. (2) For the purpose of this section, credit including information shall personal information and credit history of a borrower or person such as paying habit, outstanding debts and tax obligations and any other business details. include any information (3) Notwithstanding subsections (1) and (2), for the purpose of enabling sharing of credit information, a microfinance service provider under Tiers 2, 3 and 4 shall submit credit information to a credit reference bureau. (4) A microfinance service provider may access and use credit information through the credit reference bureau in a manner provided for in the regulations. (5) Without prejudice to the provisions of this section, the regulation of credit reference information shall be conducted in accordance with the Bank of Tanzania Act. (6) Where a microfinance service provider without reasonable cause, fails to comply with the provisions of this section, the Bank or Delegated Authority shall take to ensure such measures as may be appropriate compliance. Cap 197 (b) Supervision of Microfinance Service Providers Submission of periodic reports
Section 43Verify source
§ 44Submission of periodic reportsProvision

A microfinance service provider must submit periodic reports of its operations to the Bank or Delegated Authority, in the manner and at the times set by regulations.

44.-(1) A microfinance service provider shall submit to the Bank or Delegated Authority periodic 30 No. 10 Microfinance Act 2018 Access to information Confidentiality reports of its microfinance business operations at such times and in such manner as may be prescribed in the regulations. (2) Where a microfinance service provider without reasonable cause, fails to comply with the provisions of this section, the Bank or Delegated Authority shall take such measures as may be appropriate to ensure compliance.
Section 44Verify source
§ 45Access to informationProvision

The Bank or Delegated Authority may access information about a microfinance service provider’s activities and may ask for it in writing within the time stated in the request.

45.-(1) The Bank or Delegated Authority shall have access to information relating to activities of any microfinance service provider and may request, in writing that information be furnished within the time prescribed in the request. (2) Where a microfinance service provider without reasonable cause, fails to comply with the provisions of this section, the Bank or Delegated Authority shall take such measures as may be appropriate to ensure compliance.
Section 45Verify source
§ 46ConfidentialityProvision

The Bank, a Delegated Authority, and a microfinance service provider must keep information obtained under the Act confidential and not disclose it, except in limited cases.

46.-(1) Where the Bank, Delegated Authority or a microfinance service provider has access to information obtained under this Act, such information shall be treated as confidential and shall not be disclosed to any person. (2) Notwithstanding subsection (1), the Bank or Delegated Authority may disclose any information- (a) to an authorized agency or person where such information is needed and is to be used for supervisory or oversight purposes and that its confidentiality will be maintained; or (b) in compliance with the law, an order of the court or with the express consent of the 31 No. 10 Microfinance Act 2018 consumer concerned. Inspection of microfinance business
Section 46Verify source
§ 4748. Monitoring of microfinance business under Tier 4Offence

The Bank or Delegated Authority may inspect microfinance service providers, and providers must produce records and information when required.

47.-(1) The Bank or Delegated Authority may, in 32 such manner as may be provided for in the regulations, inspect any microfinance service provider. (2) It shall be the duty of microfinance service provider to produce before any officer authorised to make an inspection, all such books of account, records and other documents in custody or power of such person to furnish any statement or information relating to affairs of the microfinance service provider, as the inspecting authority may require within such time, as may be specified. (3) Where the Bank or Delegated Authority, after considering the report of inspection under sub-section (1) is of the view that the affairs of any microfinance service provider are being conducted to the detriment of its consumers or contrary to this Act, it may after giving such opportunity to the microfinance service provider to make representation in connection with the report, take such action as it deems fit including- (a) restrict, suspend or prohibit the payment of service the microfinance dividends by provider; (b) suspend the licence for such period as the Bank or Delegated Authority may deem fit; (c) prohibit the conversion of any profits of the microfinance service provider into capital; (d) direct the microfinance service provider to take disciplinary action against any officer involved in such conduct; (e) direct the microfinance service provider to reconstitute its management; (f) order the microfinance service provider to submit to the Bank or Delegated Authority, 32 No. 10 Microfinance Act 2018 within prescribed period- (i) a capital restoration plan; or (ii) a plan to resolve all deficiencies to the satisfaction of the Bank or Delegated Authority; (g) prohibit or suspend the microfinance service provider from awarding any bonuses, salary increments and other benefits of senior management or officers of the microfinance service provider; (h) impose restrictions on growth of assets or liabilities of a microfinance service provider as it deems fit; (i) order a microfinance service provider to do or the Bank or take such other actions as Delegated Authority may deem necessary. (4) Any person who obstructs an officer of the Bank or Delegated Authority or any other authorized person in the exercise of power conferred upon him by this section, or who neglects or refuses to produce book, record or anything which the officer of the Bank or Delegated Authority or any other authorized person may request to be produced for his inspection commits an offence.
Section 47Verify source
§ 48Monitoring of microfinance business under Tier 4Provision

The Bank or Delegated Authority must continuously monitor Tier 4 microfinance service providers and may order or direct corrective action if anomalies are found.

48.-(1) The Bank or Delegated Authority shall make or cause to be made a continuous monitoring of the business and affairs of the microfinance service providers under Tier 4 in accordance with the relevant regulations. (2) Where upon monitoring made under sub section (1), the Bank or Delegated Authority finds out anomalies in the management of the business and affairs of the microfinance service provider, the Bank or Delegated Authority may- (a) advise or order the microfinance service 33 Monitoring of microfinance business under Tier 4 No. 10 Microfinance Act 2018 Compliance with Cap.423 Consumer protection principles provider to rectify the anomalies within the prescribed time; or (b) direct the microfinance service provider to take any other action for the purposes of ensuring compliance with the requirements of this Act; (3) Where a microfinance service provider without reasonable cause, fails to comply with the order or directive issued under sub section (2), the Bank or Delegated Authority shall take such measures as may be appropriate to ensure compliance.
Section 48Verify source
§ 49Compliance with Cap. 423Provision

Microfinance service providers must set up internal control procedures to identify and report suspicious transactions, and the Bank or Delegated Authority must ensure they comply.

49.-(1) A microfinance service provider shall, in compliance with the Anti-money Laundering Act, establish procedures for internal control for the purpose of identifying and reporting suspicious transactions. (2) The Bank or Delegated Authority shall ensure each microfinance service provider operates in compliance with subsection (1). PART VII MICROFINANCE CONSUMER PROTECTION
Section 49Verify source

Part

PART VII

§ 50Consumer protection principlesOffence

Microfinance service providers must follow consumer protection principles in the applicable laws and regulations.

50.-(1) A microfinance service providers shall comply with the principles of consumer protection as provided for in the applicable laws and in the regulations made under this Act. (2) Subject to sub section (1), the principles of consumer protection prescribed in the regulations shall include- (a) terms and conditions of credit or related service that are transparent, fair, legible and protect the rights and interests of microfinance consumers or members; (b) complaints handling and dispute resolution mechanism; 34 No. 10 Microfinance Act 2018 35 Debts collection and recovery (c) full disclosure of relevant information on the products and services provided; (d) requirement for the vetting of the standard credit contracts or agreements; and (e) financial education to the consumers; (f) transparency on interest rates, fees or penalties; and (g) any other principle for the purpose of ensuring fair treatment of consumers. (3) For the purposes of this section. “consumer protection” includes principles intended to ensure transparency of the products and services of the microfinance service provider, fair treatment and safeguard of the interests and rights of consumers and fair complaints handling and dispute resolution mechanism. (4) Notwithstanding the provisions of sub sections (2) and (3), any term or condition stipulated in a contract or any relevant document purporting to grant to a microfinance service provider authority to unilaterally introduce or modify interest rate or any other loan condition shall be null and void. (5) Where a microfinance service provider without reasonable cause, fails to comply with the provisions of this section, the Bank or Delegated Authority shall take such measures as may be appropriate to ensure compliance.
Section 50Verify source
§ 51Debts collection and recoveryOffence

Microfinance debts must be collected under the regulations, with written notice first, sale of attached property only as a last resort, and a reasonable notice period before sale or disposal.

51.-(1) A debt arising out of microfinance business activities under this Act shall be collected or recovered in a manner as may be prescribed in the regulations. (2) Subject to subsection (1), the regulations issued under this section shall ensure that- (a) a debt collection measure is initiated by issuance of a sufficient written notice to the 35 No. 10 Microfinance Act 2018 debtor; (b) the attachment of a debtor’s property or collateral security for purposes of sale to discharge a debt is applied as a last resort; and 36 (c) a reasonable period is prescribed as a notice to debtor prior to sale or disposal of a debtor’s attached property. Where a microfinance service provider without reasonable cause, fails to comply with the provisions of the Bank or Delegated Authority shall take such measures as may be appropriate to ensure compliance. this section, (3) PART VIII OFFENCES AND PENALTIES General penalty
Section 51Verify source

Part

PART VIII

§ 52General penaltyOffence

A person who breaches this Act where no specific penalty is set commits an offence and, on conviction, faces penalties that vary by tier.

52. A person who contravenes any provision of this Act where no specific penalty is provided commits an offence and upon conviction shall- (a) in the case of Tier 2 and 3, be liable to a fine of not less than five million shillings and not to exceeding imprisonment for a term of not less than three months and not exceeding five years or to both; and twenty million shillings or (b) in the case of Tier 4, be liable to a fine of not than one million shillings and not less exceeding to imprisonment for a term of not less than three months and not exceeding two years or to both. shillings or ten million Compounding of offences
Section 52Verify source
§ 53Compounding of offencesCommencement

The Bank or Delegated Authority may compound an offence, order payment of up to half the fine, and handle appeals and enforcement if the person does not comply.

53.-(1) Notwithstanding the provision of this Act relating to penalties, where a person admits in writing that he has committed an offence under this Act, the Bank or Delegated Authority may, at any time prior to the 36 No. 10 Microfinance Act 2018 commencement of the hearing by a court of competent jurisdiction, compound such offence and order such person to pay sum of money, not exceeding one half of the amount of the fine to which such person would otherwise have been liable to pay if he had been convicted of such offence. is compounded (2) Where an offence in accordance with subsection (1) and proceedings are brought against the offender for the same offence, it shall be a good defense for the offender to prove to the satisfaction of the court that the offence with which the offender is charged has been compounded under sub- section (1). Cap. 20 (3) Where any person is aggrieved by any order under sub-section (1), he may within the prescribed period, appeal against such order to the High Court and the provisions of the Criminal Procedure Act shall apply to every such appeal as if it were an appeal against sentence passed by a district court in the exercise of its original jurisdiction. (4) Where a person fails to comply with the order issued under this section within the prescribed period, the Bank or Delegated Authority: (a) shall, in addition to the sum ordered, require the person to pay an interest at the rate prescribed in the regulations; and (b) may enforce the order in the same manner as a decree of a court for the payment of the amount stated in the order. PART IX GENERAL PROVISIONS Register of microfinance service
Section 53Verify source

Part

PART IX

§ 54Register of Microfinance service providersProvision

The Bank or Delegated Authority must keep and maintain a register of licensed or registered microfinance service providers, and may correct or alter the register when provider details change.

54.-(1) The Bank or Delegated Authority shall cause to be kept and maintained a Register of all 37 No. 10 Microfinance Act 2018 providers microfinance service providers licensed or registered in terms of this Act. 38 (2) The Register shall contain- (a) names and addresses of the microfinance service provider; of (b) particulars registration including date of licensing or registration and number of certificate issued; and licensing or Publication of microfinance service providers Protection for acts done in good faith Cap. 16 Cap. 76 (c) such other particulars as may be determined by the Bank. (3) The Bank or Delegated Authority may make any alteration or correction in relation to any change in the contents of the Register regarding particulars of registered microfinance service provider.
Section 54Verify source
§ 55Publication of microfinance service providersProvision

The Bank must publish, at least every six months or at intervals it determines, the names and full addresses of microfinance service providers in the Gazette and a widely circulated newspaper.

55. The Bank shall, for the purpose of transparency and enhancement of public awareness, in every six months or in such intervals as the Bank may determine, publish in the Gazette and in any newspaper of wide circulation, the names and full addresses of microfinance service providers- (a) licenced or registered to undertake microfinance business under this Act; (b) whose licences or certificates of registration have been revoked; and (c) which by any reason have ceased to operate.
Section 55Verify source
§ 56Protection for acts done in good faithProvision

Officers or agents of the Bank or Delegated Authority are protected from action, liability, or demands for acts or omissions done in good faith while carrying out duties under the Act.

56. Without prejudice to the provisions of section 284A of the Penal Code and section 3 of the Public Officers (Recovery of Debts) Act, no act or thing done or omitted to be done by any officer or agent of the Bank or Delegated Authority shall, if done or omitted to be done in good faith in execution or purported execution of his duties under this Act shall subject that person to any action, liability or demand. 38 No. 10 Microfinance Act 2018 Transitional provisions 39 Local content Liability for acts of bodies of persons
Section 56Verify source
§ 57Transitional provisionCommencement

People who were already operating a microfinance business before this Act started must apply for a license or registration within 12 months after commencement.

57. A person who, before the commencement of this Act, was operating a microfinance business shall within twelve months of commencement of this Act apply for a license or registration in accordance with this Act.
Section 57Verify source
§ 58Local contentProvision

A microfinance service provider undertaking microfinance business must comply with local content laws, including rules on employing and training Tanzanians.

58. Where a microfinance service provider undertakes microfinance business, such microfinance service provider shall comply with applicable laws on local content including employment and training of Tanzanians.
Section 58Verify source
§ 59Liability for acts of bodies of personsOffence

If an association of persons commits an offence under the Act, people in apparent control may be treated as having committed it too.

59. Where an offence is committed under this Act by an association of persons, whether corporate or unincorporated and such association is found to have committed an offence with the knowledge or connivance of, or is attributable to any act or default on the part of any person or persons in apparent control of the association of persons, such person or persons shall be deemed to have committed the offence. Regulations
Section 59Verify source
§ 60RegulationsProvision

The Bank may make regulations for microfinance matters under this Act.

60.-(1) The Bank may make regulations for the better carrying out of the provisions of this Act. (2) Without prejudice to the generality of sub section(1), the Bank may make regulations prescribing- (a) procedures of application and forms to be used for licensing of microfinance service providers under Tier 2 and Tier 3; (b) requirements and procedures for formation, registration, and operation of microfinance service providers under Tier 4; (c) matters in respect of which the activities of microfinance service providers under Tier 4 shall be monitored; (d) inspection matters including appointment of 39 No. 10 Microfinance Act 2018 inspectors or authorized officers to conduct inspection; (e) various fees payable under this Act; (f) principles for consumer protection including 40 dispute handling procedures and provision of financial education; (g) the manner in which financial education shall be provided by microfinance service providers; (h) payments to be made and conditions to be complied with for members or clients applying for loans; (i) conditions and manner in which dividends or other forms of profit shall be distributed to the members or clients; (j) appointment and qualifications of the internal the authorized auditor microfinance service provider; person of or (k) permissible and prohibited activities to be undertaken by microfinance service providers; of sharing collection information including credit information; (l) submission, and (m) criteria and procedures for transformation of microfinance service providers; (n) various measures administrative contravention of provisions of this Act; for (o) matters relating to commodity microfinance business undertaken under this Act; (p) procedures for application of licence and matters relating to individual money lenders; (q) conditions and manners for providing digital microfinance business; and (r) any other matter that may be, or is required to be prescribed by the Bank under this Act. 40 No. 10 Microfinance Act 2018 (3) The regulations made under this section shall be published in the Gazette.
Section 60Verify source
§ 61Disapplication of certain provisions to Tier 4Amendment

Sections 6(2), 9, 10, 35, 39, 44, and 47 do not apply to Tier 4.

61. The provisions of sections 6(2), 9, 10, 35, 39, 44, and 47 shall not apply to Tier 4. Disapplication of certain 41 provisions to Tier 4 PART X CONSEQUENTIAL AMENDMENTS (a) Sub Part I AMENDMENT OF THE BANKING AND FINANCIAL INSTITUTIONS ACT (CAP.342) Construction Cap 342 Amendment of long title Amendment of section 2
Section 61Verify source

Part

PART X

§ 62ConstructionProvision

This sub part is to be read together with the Banking and Financial Institutions Act (the principal Act).

62.-(1) This sub part shall read as one with the Banking and Financial Institutions Act herein after referred to as the "principal Act".
Section 62Verify source
§ 63Amendment of long titleAmendment

The principal Act’s long title is changed by removing the words about “activities of credit co-operative societies and schemes.”

63. The principal Act is amended in the long title by deleting the words “activities of credit co-operative societies and schemes.
Section 63Verify source
§ 64Amendment of section 2Amendment

Section 2 of the principal Act is amended by deleting subsections (4), (5) and (6).

64. The principal Act is amended in section 2 by deleting sub sections (4), (5) and (6). (b) Sub Part II AMENDMENT OF BANK OF TANZANIA ACT (CAP.197) Construction Cap 197
Section 64Verify source
§ 65ConstructionAmendment

This section says the subpart must be read together with the Bank of Tanzania Act, which it calls the principal Act.

65. This sub part shall be read as one with the Bank of Tanzania Act herein after referred to as the "principal Act". 41 No. 10 Microfinance Act 2018 Amendment of section 5
Section 65Verify source
§ 66Amendment of section 5Amendment

Section 5 is amended to add words covering the regulation and supervision of microfinance business.

66. The principal Act is amended in section 5, by adding at the end of subsection (1) the following words: “and to regulate and supervise microfinance 42 business.” AMENDMENT OF THE COOPERATIVE SOCIETIES ACT (CAP.211) (c) Sub Part III Construction Cap 211 Amendment of section 141
Section 66Verify source
§ 67ConstructionProvision

This subpart must be read together with the Cooperative Societies Act, called the principal Act.

67. This sub part shall be read as one with the Cooperative Societies Act herein after referred to as the "principal Act".
Section 67Verify source
§ 68Amendment of section 141Amendment

This section amends section 141 of the principal Act by deleting subsection (3).

68. The principal Act is amended in section 141 by deleting subsection (3). Passed by the National Assembly on the 16th November, 2018. STEPHEN KAGAIGAI Clerk of the National Assembly 42
Section 68Verify source

Legislative relationships

9 referenced instruments

Names are derived from the stored provision headings and citation-enrichment layer. Treat this as a research index and verify each relationship against the source text.

A–F

6 instruments

  • audited accounts to comply with the Act

    Section 40

  • Bank or Delegated Authority. 10 No. 10 Microfinance Act

    Section 6

  • Bank shall be to regulate and supervise the operations of microfinance business in accordance with this Act

    Section 12

  • Bank under this Act

    Section 3

  • Cooperative Societies Act

    Section 18

  • Criminal Procedure Act

    Section 53

N–S

2 instruments

  • Penal Code

    Section 56

  • principal Act

    Section 68

T–Z

1 instrument

  • Tanzania Act

    Sections 43, 65

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