The government has tabled a Bill seeking to make it easier for Tanzanians and businesses to access loans by using movable assets as collateral, in a move expected to widen financial inclusion and deepen private sector financing.
Finance Minister Ambassador Khamis Mussa Omar presented the Movable Property Security Rights Bill, 2026, in Parliament in Dodoma, saying the proposed legislation would establish a comprehensive framework for registering, managing and enforcing security interests in movable property.
The Bill seeks to increase the proportion of Tanzanians using banking services from 22 percent in 2023 to 50 percent by 2030, while also raising private sector credit as a share of gross domestic product (GDP) from 22.5 percent in 2024 to 50 percent over the same period.
The government also expects the financial sector's contribution to employment and economic activity to increase, with its share targeted to rise from 17.1 percent in 2024 to 20 percent by 2030.
Ambassador Omar said the proposed law would help remove one of the barriers facing individuals and businesses seeking credit by allowing a wider range of movable assets to be pledged as collateral instead of relying mainly on land and buildings.
“This is important in expanding access to credit for citizens and businesses by allowing movable assets to be used as collateral,” he said.
Under the proposed framework, assets that could potentially support borrowing would include both tangible and intangible property, subject to conditions to be established under the law and regulations.
The minister said the absence of a unified registration system for movable collateral has created risks in the lending market. In particular, the same asset could be pledged to more than one lender without subsequent creditors being aware of existing claims.
Such gaps, he said, could contribute to rising non-performing loans and weaken the management of credit risks within the financial sector.
The Bill also seeks to address weaknesses in the management and enforcement of movable collateral, including the absence of clear and uniform procedures for protecting the rights of borrowers and lenders when collateral is disposed of to recover outstanding debts.
Another concern is the nature of movable assets themselves, some of which can lose value quickly or deteriorate if they are not properly stored and managed.
The proposed legislation is divided into 10 parts covering the entire life cycle of a security interest, from creation and registration to enforcement and disposal of collateral.
The first part contains preliminary provisions, including the title, commencement, application and interpretation of key terms. The second establishes provisions within the Bank of Tanzania relating to security interests, including the central bank's powers and delegation of functions.
The third part sets out the types of security interests and assets that may be used to secure one or more obligations. It covers tangible and intangible assets and requires the Bank of Tanzania to consult the minister before declaring specific assets eligible as collateral.
The fourth part establishes a registration framework, including the validity of registrations, amendments, cancellations and access to registered information.
The fifth part addresses security interests against third parties, proceeds generated from collateral and situations where secured movable assets are combined with other property.
The sixth part introduces rules governing priority among competing creditors, including circumstances where different borrowers or lenders have interests in the same collateral. It also provides for the treatment of proceeds and the impact of insolvency on competing claims.
The seventh part deals with the rights and obligations of borrowers and lenders, including inspection of collateral, provision of information and the responsibility to preserve secured assets.
It also covers claims involving payments made by debtors, anticipated proceeds and payment instruments linked to the enforcement of security interests.
The eighth part focuses on enforcement, including registration of enforcement notices, disposal of collateral, distribution of proceeds and proposals for accepting collateral in settlement of outstanding debt.
It further provides for objections to such proposals and establishes rules governing the custody and preservation of collateral, including related costs and a borrower's right to select an alternative place for storing the asset.
The ninth part contains general provisions on enforcement of rights and obligations, compensation for breaches, offences relating to false information, complaints, reviews of decisions by the Bank of Tanzania and appeals.
It also empowers the minister to make regulations necessary for implementing the proposed law.
The final part proposes amendments to several laws, including the Bank of Tanzania Act, Companies Act and insolvency laws, as well as other legislation governing assets and financial matters.
If enacted, the legislation would mark a significant shift in Tanzania's credit market by broadening the range of assets that can support borrowing and strengthening the legal infrastructure for secured lending.
The government expects the framework to improve access to finance, strengthen protection for both borrowers and lenders, reduce risks associated with multiple claims over the same asset and support the growth of Tanzania's financial sector.