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The government has reminded borrowers to thoroughly read the terms of any loan agreements before taking out loans from financial institutions to avoid potential issues arising from harsh conditions or high-interest rates that can hinder loan repayment.
The Acting Regional Administrative Secretary of Mwanza, Arch. Chagu Nghoma, emphasized this when he met with a team of experts from the Ministry of Finance and its institutions, who were in the region to provide financial education to various groups of citizens.
"We continue to remind borrowers to be vigilant in reading the contracts they enter into, especially with the increasing complaints from borrowers who are burdened with high-interest rates, harsh repayment terms, and unclear penalties after failing to meet loan conditions," said Arch. Nghoma.
He further added, "If a borrower does not fully understand the contract, it is crucial to seek legal or financial advice before signing any loan agreement to prevent future complications."
Arch. Nghoma also urged borrowers to be cautious and avoid borrowing from informal financial institutions, which may impose harsh conditions in the event of loan default.
"Borrowing from such institutions can lead to serious financial difficulties," he cautioned.
One of the participants in the financial education training, a resident of Buhongwa, Mwanza, Mrs. Julieth Siange, expressed her gratitude for the knowledge shared during the session.
"We are now more aware and have been strongly advised against joining unregistered groups. Instead, we should join officially registered and government-recognized groups so that in case any issues arise, we can receive legal assistance," she said.
The leader of the team of financial education experts from the Ministry of Finance, Mr. Salim Khalfan Kimaro, acknowledged the government's efforts to regulate financial service providers.
"Despite the government's various measures to establish laws and regulations for financial institutions, we are still facing challenges with some service providers who fail to comply with these regulations," he explained.
Mr. Kimaro further clarified, "In response to these challenges, the government will continue to monitor financial institutions closely and take disciplinary actions to ensure that they operate in accordance with the established procedures, regulations, and laws."
The Ministry of Finance is continuing its financial education campaign for citizens across all groups as part of the implementation of the National Financial Sector Development Plan for 2021/2022 to 2029/2030.