The Chunya District Council in Mbeya Region has stepped up efforts to recover TZS 600 million owed by groups that benefited from the council’s 10 per cent loan programme, with legal action now being prepared against persistent defaulters.
The loans were issued to various groups to help residents establish or expand income-generating activities, improve their livelihoods and become economically self-reliant.
However, the council says poor repayment by some beneficiaries is threatening the sustainability of the programme, which depends on recovered funds being made available to other citizens.
Speaking to journalists on October 6, 2026, Chunya District Executive Director Tamimu Kambona said the council had disbursed more than TZS 1 billion through the loan programme, but repayment had not matched expectations.
“Our council has issued a total of TZS 1 billion in loans, but repayment has been poor among some groups. We have therefore reached a stage where we are beginning procedures to take defaulters to court so that the money can be recovered,” Kambona said.
The move is expected to help protect public funds and ensure that citizens who are ready to invest in productive activities continue to have access to affordable financing.
Kambona said the council would continue providing the loans and was planning to disburse more than TZS 1 billion this year.
He stressed, however, that beneficiaries must repay their loans as agreed so that the programme can reach more residents.
He called for stronger cooperation between community development officers and beneficiaries to address repayment challenges and ensure that the funds continue circulating among citizens.
Some wards have already been restricted from accessing new loans until they clear outstanding debts from previous financing, a measure aimed at promoting responsible use of the programme and protecting opportunities for other residents.
Acting Chunya District Community Development Officer Esther Kondobole said groups in several wards, including Chokaa, Itewe, Sangambi and Makongolosi, were among those owing a combined TZS 600 million.
She said the council was following up on the affected groups and would take necessary measures, including legal action where appropriate, to recover the money.
Kondobole said some young beneficiaries involved in mining were among those facing repayment and follow-up challenges because the nature of their activities often requires them to move from one location to another in search of mining opportunities.
“Many young people are engaged in various businesses and activities, but some are involved in mining, which requires them to move from one area to another. Today they may be in one ward, but tomorrow they may hear that there is gold somewhere else and leave, making it difficult to locate them,” she said.
She added that mining also presented a challenge in loan repayment because beneficiaries may agree to repay after a specific period, while income from mining can be unpredictable.
The council's recovery efforts highlight the importance of balancing accountability with support for beneficiaries facing genuine economic challenges.
Ensuring that public loans are repaid will enable the funds to continue circulating and give more residents an opportunity to access capital, create jobs, grow small businesses and improve their household incomes.
For Chunya residents, effective recovery of the funds could therefore mean more opportunities for citizens to benefit from the loan programme in the future.