Dar es Salaam. The Bank of Tanzania (BoT), in collaboration with the Tanzania Association of Microfinance Institutions (TAMFI) and the Union of Microfinance Institutions (TAMIU), has formally launched a strategic self-regulation framework aimed at enhancing governance and market conduct among Tier II microfinance service providers.
The new initiative seeks to strengthen discipline in self-supervision and streamline market behaviour within the microfinance sector.
It comes as part of ongoing efforts to safeguard consumers and improve operational efficiency across the country’s growing microfinance landscape.
The BoT said the framework is designed to empower microfinance associations to play a greater role in supervising their members, thus complementing the Bank’s regulatory oversight.
The framework, which introduces an element of strategic partnership, marks a shift towards participatory regulation as the sector evolves.
Under this arrangement, the BoT retains its statutory mandate while delegating certain supervisory roles to recognised industry associations.
TAMFI and TAMIU have been officially assigned the role of Self-Regulatory Organisations (SROs), tasked with promoting compliance, resolving disputes, and facilitating the adoption of best practices among their members.
According to the BoT, the associations are now responsible for deploying credible self-regulatory mechanisms, including advisory guidelines on market conduct, risk management, and customer protection.
This structure is expected to promote a healthier, more transparent microfinance ecosystem.
“The Central Bank will continue to license Tier II microfinance institutions, monitor general compliance, and support TAMFI and TAMIU in implementing their obligations in line with agreed standards,” reads part of the statement signed by BoT Governor Emmanuel M. Tutuba.
All Tier II institutions are now required to register with either TAMFI or TAMIU within six months of the announcement, and to adhere to the new self-regulatory framework.
Institutions are also expected to comply with their licence conditions and ensure adherence to regulatory and operational standards.
The BoT said the framework is not only about compliance but also about strengthening the credibility and sustainability of the sector.
“This implementation demonstrates a shared commitment to improving the operating environment for microfinance service providers, ensuring their services are trustworthy, transparent, and user-friendly,” said the BoT.
Governor Tutuba further called on stakeholders and the public at large to support the initiative, describing it as crucial in expanding financial inclusion and building a resilient microfinance industry in Tanzania.
The move is expected to enhance consumer protection, reduce regulatory gaps, and facilitate the development of an inclusive financial system by enabling grassroots financial institutions to thrive under guided autonomy.
