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The Bank of Tanzania (BoT) has introduced a new guided self-regulatory framework for Tier II Microfinance Institutions in a move aimed at improving market conduct, enhancing consumer protection, and strengthening governance within the sector.
The Bank of Tanzania (BoT) on Thursday announced the rollout of the initiative in partnership with the Tanzania Association of Microfinance Institutions (TAMFI) and the Tanzania Microfinance Institutions Union (TAMIU).
The two industry bodies have been formally designated as Guided Self-Regulatory Institutions (GSRIs) under the new structure.
The arrangement, which the BoT described as a “strategic collaborative initiative,” is designed to complement the central bank’s existing supervisory mechanisms by leveraging the outreach, peer-monitoring, and dispute resolution capacities of the associations.
“The Bank of Tanzania will continue to issue licenses and provide overall regulatory oversight, while supporting TAMFI and TAMIU to ensure adherence to sound market practices among microfinance providers,” BoT Governor Emmanuel Tutuba said in a public notice.
All Tier II Microfinance Institutions operating in Tanzania will now be required to join either TAMFI or TAMIU within six months from the date of the notice and fully comply with the self-regulation agreements established under the framework.
The initiative reflects the central bank’s ongoing reforms to boost transparency, trust, and customer-centric services in the financial system, particularly in underserved and low-income communities.
Tier II microfinance providers typically operate at community levels and play a critical role in expanding access to financial services.
According to the BoT, TAMFI and TAMIU will be responsible for enforcing codes of conduct, resolving disputes among members, and promoting industry-wide best practices.
The two bodies are also expected to assist their members in meeting licensing and compliance requirements as stipulated by the central bank.
“This is a shared commitment to create a more robust, inclusive, and user-friendly microfinance ecosystem in Tanzania,” said Tutuba. “We urge all stakeholders and the public to support this initiative, which is key to deepening financial inclusion and improving service delivery nationwide.”
The BoT’s decision comes amid broader regulatory reforms to improve oversight and efficiency in Tanzania’s fast-evolving financial services landscape.