CONDITIONS for accessing 10 percent of council earnings as loans for women, youth and people with disabilities are being relaxed, the government has stated.

Prime Minister Dr Mwigulu Nchemba announced the changes yesterday, when responding to questions in Parliament, stressing singularly that the beneficiaries must be Tanzanians, holding identity cards from the National Identification Authority (NIDA).

Previous procedures were lengthy and often prohibitive, particularly requirements for house collateral and guarantee letters from public servants, he said in response to Agnesta Kaiza (Segerea, Chaumma), who asserted that many eligible people have struggled to access the loans, despite improvements in deliverance through certain banks. 

“Banks have imposed strict conditions, often excluding those in need due to lack of collateral. Should the government not revise this approach?” she asked, pointing at the Dar es Salaam City Council, where 91bn/- remains unloaned.

The shift to bank-disbursed loans was intended to prevent misuse by ghost groups and unscrupulous officials but repayment rates have historically been low, the premier noted, recalling meeting with small business owners and informal traders lately, who expressed difficulties meeting stringent loan conditions.

“To make loans genuinely accessible, the government has instructed that requirements for house deeds, guarantee letters and other criteria be relaxed. Bank officials were directed to verify that applicants are Tanzanian and hold a NIDA card,” he declared.

“Those without one will undergo careful assessment and may be asked for additional documentation,” he said, affirming that some applicants without IDs had studied in Tanzania but later worked abroad, contributing to other communities. 

The government recently allocated 200bn/- for youth in the ministerial estimates, with the next budget expected to provide a five per cent increment to this allocation to create trading spaces for informal traders, including acquiring land if necessary, he said.

Following these affirmations, Speaker Mussa Zungu urged council directors to enforce the Prime Minister’s instructions, airing the view that some businesses such as online ventures rely on trust rather than physical offices.

The 10 per cent loan programme from council earnings has faced criticism over misuse of funds, including disbursements to ineligible recipients, as highlighted by the Local Authorities Accounts Committee (LAAC) standing committee and annual reports of the Controller and Auditor General (CAG). 

In April 2023, former Prime Minister Kassim Majaliwa ordered councils to suspend loans temporarily while a new system is designed and approved, the premier noted.