By Correspondence, Longido
Authorities in Tanzania’s Longido District have given borrower groups 12 days to repay outstanding government loans, warning that legal action will follow if the funds are not returned by the end of the month.
The District Commissioner of Longido, Salum Kalli, said on January 19 that groups that received loans under the local government’s 10% community development fund between 2017 and 2022 must clear their outstanding balances by January 31.
From February 1, the district’s security and safety committee, working alongside the community development department, will begin verifying amounts borrowed and repaid on a group-by-group basis, Kalli said.
“Any group that fails to repay will face strict legal measures,” he said. “The purpose of these loans is to support development, but repayment is necessary so others can benefit as well.”
The interest-free loans are provided by local councils to women, youth, and people with disabilities as part of Tanzania’s financial inclusion and poverty reduction programmes.
Kalli said that some groups had misused the funds by diverting the money for personal consumption rather than investing in income-generating activities, which contributed to widespread defaults.
In a related move, Kalli instructed the acting district executive director to formally notify ward executive officers to ensure that elected councillors do not discourage repayment.
The district’s administrative secretary, Rahma Kondo, said no group would be exempt from repayment, dismissing claims that drought had prevented borrowers from meeting their obligations.
“Some groups borrowed when there was no drought and are now operating large, visible businesses but are deliberately failing to repay,” Kondo said, adding that public servants who borrowed from the scheme would also be required to settle their debts.
Officials said enforcement of the repayments is intended to protect the sustainability of the fund and ensure continued access to credit for vulnerable groups.