Tanzania: 48 firms strengthen services

Jan 2012
Dar es Salaam, Tanzania, January, 09 2012 - The first ever code of conduct for microfinance institutions in Tanzania has been endorsed to guarantee customers of better services. About 48 microfinance institutions in the country assented to the code of standards of practices that will greatly improve delivery of services to micro-borrowers.

In a statement issued yesterday, the board of directors of the Tanzania Association of Microfinance Institutions (TAMFI) called on clients to voice their concerns with regard to quality of services and practices of their respective service providers.

TAMFI has set up a phone number - 0764 668 331 - which small-scale and medium enterprise borrowers can use to complain about micro-finance institutions that will fail to adhere to the code of conduct.  

The 48 institutions that have signed up for the code of conduct are members of TAMFI.“To the Tanzania Microfinance Industry, this is a great achievement towards developing a well organised and responsible microfinance sector,” says the statement signed by Ms Winnie Terry, the TAMFI executive secretary.

“With this code of conduct, TAMFI members are expected to take a leading role to deliver high quality and responsible financial services to the community. 

The code is intended to make Microfinance Institutions become more responsive to the clients they serve,” the statement adds.

The code of practice requires microfinance institutions to disclose interest rate and other service costs to their members through loan contracts, advertisements, brochures and notice boards.

It also states that loan contract is borrower’s right and a copy of loan repayment schedule should be provided to the borrower. The code also says that loan contracts should be clear, understandable and use national language.The code requires lenders to provide verbal explanations to all clients, especially those who cannot read or write.

The statement says that the code requires staff to behave ethically when serving clients and calls for the use of appropriate money collection practices.

At the same time, the institutions are required to explain in full the consequences of late and non-repayments as well as collections procedures before they take their loans and during their loan repayments period.

The code also requires the institutions to have customer complaint resolution mechanism, which must include programmes to educate customers on their rights, among other vital issues.

Among the 48 institutions subscribing to the code of conduct are Tujijenge Tanzania Limited, African Microfinance, Pride, Dar-es-Salaam Community Bank, Akiba Commercial Bank, CRDB Microfinance Services Company, SEDA, YOSEFO, PTF, SELF, OIKO Credit, K-Finance, FAIDERs, among others.

Source : The Citizen

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