Accessible Free-Interest Loans for Women, Youth and People with Disabilities


Since 1993, the government of Tanzania has been providing loans to the vulnerable and marginalized groups, initially being women and youth  groups then following the amendment of The Local Governments Act of 1982 as amended in 2018, section 37A (4) requires Local Government Authorities (LGAs) to provide 2% loans from its own revenues with no interest to the people living with disabilities (PWDs).

Provision of the loans by LGAs is geared to empower women, youth and people with disabilities enabling them with financial muscles to carry out income generating activities to lift their households out of poverty. The law distributes the free interest loans in the  ratio of 4:4:2 (4% women, 4% youth and 2% for people living with disabilities (PWDs).

This was unraveled at the Policy Forum Breakfast Debate held on October 30, 2020 where Mr. Reynald Maeda, the Secretary General of the United Nations Association of Tanzania (UNATZ) highlighted the key focus of the  presentation  on the general outlook of the provision of 10% loans and what UNATZ does as an association to ensure effective governance and implementation of the regulations.

Maeda highlighted the missing components at the local government level comprises of  lack of proper machinery for governance and monitoring of the loans to ensure sustainability for the beneficiaries and that awareness raising on the accessibility of the loans is significant to capitalize on economic empowerment with an inclusive lens. He also mentioned that the diversion of funds to other projects instead of serving the intended purpose to build economic resilience and sustainable activities in areas of agricultural production, livestock keeping, poultry husbandry and trading was a challenge.

To curb this gap, Maeda mentioned that UNATZ in partnership with Policy Forum and President’s Office – Regional Administration and Local Governance (PO-RALG) have collectively started initiatives to develop national guidelines on how to manage  the 10% loans to women, youth and PWDs.

However, in her contribution, the former Tanzania ambassador to Kenya, Dr Pindi Chana, commended the government for setting the interest-free loans  which have been sustainable from 1993 to the recipients , making a comparison in the East African Community (EAC).

She braced the idea of having uniform guidelines that will govern the 10% loans and also recommended that the groups entitled for the loans should involve members with common goals in undertaking economic projects in order for them to equally benefit from disbursement.

Moreover , Mr. Khalfan Abdallah urged authorities responsible with disbursement of interest-free loans to reduce systemic bureaucracy which sometimes prevents the intended groups from benefiting the  allocated funds.

In summary the facilitator of the debate, Ms. Iman Hatibu commended the initiatives by UNATZ, PF and PO-RALG and stressed that formulation of uniform guidelines will establish procedures for beneficiaries to access loans and set friendly repayment time-frame.

“Systems should be put in place to avoid defaulters and ensure that the funds revolve and develop sustainability for the future generation.”

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