Government Notice No. 80 on Regulation on Microfinance Companies and Microcredit Activities
(enacted in 2005)
Government Notice No. 80 on Regulation on Microfinance Companies and Microcredit Activities of 2005 regulates microfinance companies (MFCs) as well as banks and other financial institutions engaged in microcredit and savings and credit cooperative societies and schemes licensed by the Bank of Tanzania.
The regulation states that:
- MFCs shall be incorporated as companies limited by shares, with a minimum core capital of Tshs. 800,000,000 in the case of MFCs with nation-wide branches and a minimum capital of Tshs. 200,000,000 in the case of unit MFCs;
- MFCs shall, at all times, maintain core capital and total capital at not less than 10% and 15% respectively of its total risk weighted assets and off balance sheet exposure;
- Institutions engaged in granting individual micro credits shall conduct an appraisal of the character, payment history and payment capacity of each client; and
- For the purposes of the computation of capital adequacy ratio, micro credits shall have a 100% weighting.
The regulation includes additional provisions, among others, on the following topics:
- Licensing, branches, restricted activities;
- Lending policies and procedures, accounting and audits; and