Microfinance Registration in Tanzania

MICROFINANCE REGISTRATION IN TANZANIA Microfinance services refer to the financial services provided to low & mid-income individuals or groups who are typically excluded from traditional banking. Generally, microfinance services include the basic financial services such as loans, saving accounts and insurances services. REGULATION OF MICROFINANCE The Bank of Tanzania (BOT) which is the Central Bank is the main Regulator of the Microfinance Institutions in Tanzania. THE MAIN LAWS REGULATING MICROFINANCE SERVICE PROVIDERS IN TANZANIA a) The Microfinance Act No. 10 of 2018 (“The Microfinance Act”).

Cap 407 b) The Microfinance (Non-Deposit Taking Microfinance Service Providers) Regulations, 2019 .GN 679 of 2019 c) Microfinance (Savings and Credits Cooperative Societies) Regulations 2019 GN 675 of 2019 d) The Microfinance (Community Microfinance Groups) Regulations 2019, GN No.678 of 2019 e) The Microfinance (Delegation of Powers and Functions) (Tier 3) 2020, GN No. 887 f) The Microfinance (Delegation of Powers and Functions) (Tier 4) GN No. 888, 2019 g) Banking and Financial Institutions Act, Cap.342 h) Anti-Money Laundering Act, Cap 423 i) Anti-Money Laundering Regulations,2022 GN No.

397,2022 j) The Bank of Tanzania (Financial Consumer Protection) Regulations 2020 k) The Bank of Tanzania (Corporate Governance) Regulations 2021 l) The Foreign Exchange Regulations,2022 CATEGORIES AND LICENCING OF MICROFINANCE SERVICE PROVIDERS According to Section 3 of the Microfinance Act, a microfinance business means the deposit and non-deposit taking business including receiving money by way of deposits or interest on deposits or borrowing; accepting savings and providing loans; providing micro credits, micro savings; transfer and payment services; providing commodity microfinance. Section 5 (1) of the Microfinance Act No. 10 of 2018 (hereinafter referred to as “the Microfinance Act”) has classified the microfinance service providers in numbered tiers as follows: – 1. TIER 1 Banks and Microfinance Banks- Deposit Taking Microfinance Institution.

LICENCING PROCEDURE UNDER TIER 1 The licensing of Tier 1 (is regulated by the Banking and Financial Institution Act No. 5 of 2006 (hereinafter referred to as “the Banking and Financial Institutions Act”). Section 8 of the Banking and Financial Institutions Act requires all applications under Tier 1 to be made to the BOT in writing accompanied with the requirements necessary for the application. 2. TIER 2 Credit Companies and Financial Organizations-Non-Deposit Taking Microfinance Service Providers. LICENSING PROCEDURES UNDER TIER 2 Tier 2 microfinance service providers must be registered as a business in Tanzania. They

must be registered either as a company under the Companies Act No. 12 of 2002, a business firm or a sole proprietor under the Business Licensing Act, 1972. Regulation 6 of the Microfinance (Non-Deposit Taking Microfinance Service Providers) Regulations, 2019 requires all microfinance service providers who fall under Tier 2 to submit license applications to either the BOT headquarters or its branches located in Arusha, Mwanza Mbeya, Mtwara, Dodoma and Zanzibar. 3. TIER 3 Savings and Credit Cooperatives Societies – SACCOS LICENSING PROCEDURES UNDER TIER 3 Licence applications for microfinance service providers falling under Tier 3 are submitted to the office of the Registrar of Cooperative Societies in the respective region through the Tanzania Cooperative Development Commission (TCDC) licence application system.

The Registrar of cooperative societies undertakes the function of licensing cooperative societies under delegated authority as provided by Regulation 5 of the Microfinance (Savings and Credit Cooperative Societies) Regulations of 2019 (“the SACCOS Regulations”). Essentially, it is the BOT, which is vested with the authority to licence cooperative societies. However, the BOT has delegated such powers to the Registrar of Societies through the Microfinance (Delegation of Powers and Functions) (Tier 3) Notice GN No. 887 which was published on 22nd November, 2020. Tier 3 microfinance service providers are issued with a licence in either category A or B, which differs by factors such as business activities and minimum capital requirements. 4.

TIER 4 Community Microfinance groups LICENSING PROCEDURES UNDER TIER 4 License applications under Tier 4 are submitted to the Local Government Authorities, which operate under delegation authority. The BOT has delegated its authority to licence Tier 4 applicants through the Microfinance (Delegation of Powers and Functions) (Tier 4) GN No. 888, 2019 which has to be read together with Section 28 (1) of the Microfinance Act and the Microfinance (Community microfinance Groups) Regulations 2019. Section 28 (2) of the Microfinance Act provides for the requirements for licensing of Tier 4 microfinance service providers. STARTING A MICROFINANCE BUSINESS IN TANZANIA Microfinance business can be started by - Individual Lender (Sole Proprietor) - Company PROCEDURES TO START A MICROFINANCE BUSINESS AS AN INDIVIDUAL LENDER SOLE PROPRIETOR AND AS A COMPANY 1. Prepare capital.

The Minimum capital required for an individual lender is TZS 20 million. 2. Register Business Name as a Sole Proprietor at BRELA under the Business Name Registration Act. 3. Get an office premise and sign a Lease Agreement. 4. Register for a Tax Identification Number (TIN) at Tanzania Revenue Authority (TRA).

Here you should get a TIN Certificate and Tax Clearance Certificate. 5. Prepare application fee. This will be paid to the Intermediary Account at the BOT. The pay slip will be required. 6.

Prepare the following documents: i) Application letter in a prescribed form. ii) Proof of payment of application fee. iii) Certified copy of Business Name Registration Certificate. iv) Certified copies of academic and professional certificates of the Chief Executive Officer v) Proof of availability of capital and the source of income of the proposed microfinance service provider. vi) Certified copy of TIN certificate and Certified copy of tax clearance certificate for the applicant. vii) Lending Policy viii) Certified declaration that the money to be invested have not been criminally obtained. ix) Proof of citizenship of the CEO/Individual money lender and curriculum vitae, two current passport size photographs and a certified copy of either a copy of Passport for foreigners or National ID. x) Dully filled questionnaire for the CEO/Individual money Lender contained under the fourth schedule of the Regulations. xi) Details of the Contact person including Name, Postal Address, telephone number and email address. xii) Dully filled Questionnaire for Directors, Owner(s) or Chief Executive Officer contained under the Fourth Schedule to the regulations. xiii) Certified copy of Incorporation. xiv) Certified copy of Memorandum and Articles of Association, constitution or Bylaws. xv) Board Resolution authorizing application for license. xvi) List of all the subscribers, members of the Board and the Chief Executive Officer. xvii) Credit reference reports for every subscriber with ownership of 5% or more, members of the Board and the CEO. xviii) Certified copies of Tax clearance Certificate for the applicant, members of the Board and the CEO. xix) Apply for business license at the Municipal Authority.

Disclaimer The views expressed in this paper are those of the author only and should not be considered as an official interpretation, defamatory or interference of any legislation, laws or policies of any country including Tanzania. The contents of this paper should not under any circumstances be reproduced or used without our express written consent. It should not be considered as a legal advice to any of its recipient(s) and should not be relied upon without obtaining further legal advice. We accept no liability for any loss occasioned or suffered due to the contents of this paper.

29 September 2026 New Mini LGN Rules Now Published in Tanzania Petroleum (Mini-Liquefied Natural Gas for Domestic and Cross-Border Trade Activities) Rules, 2026 The Rules apply to and govern all Mini-LNG activities in Mainland Tanzania, including liquefaction, storage, regasification, supply, cross-border trade and related activities. "Mini-LNG" means liquefied natural gas infrastructure and operations undertaken on a small scale, with a total capacity not exceeding 0.5 million metric tonnes per annum (MTPA). Construction approval A person intending to construct, install or establish a Mini-LNG facility must obtain construction approval before commencing construction. Construction without prior approval is an offence.

The person is prohibited from continuing construction until the requirements under the Rules are complied with, including obtaining the necessary environmental clearance certificate from the National Environmental Management Council. The application must be made using Form No. 1 and accompanied by a non-refundable application fee. The Authority shall publish the application in at least two newspapers of wide circulation, one in English and one in Kiswahili. Public comments may be submitted within fourteen days. The Authority shall decide a duly submitted construction approval application within thirty days and notify the applicant within seven working days after the decision. Construction approval ceases to have effect if construction does not commence within twenty-four months from the date of issue.

Requirement for a licence A person shall not conduct a Mini-LNG activity without a licence issued by the Authority. The Rules provide for the following licences: • Mini-LNG liquefaction plant licence; • Mini-LNG storage licence; • Mini-LNG regasification facility licence; • Mini-LNG supply licence; • Mini-LNG filling station licence; • Mini-LNG own-use licence; • Mini-LNG supply and cross-border trade licence; and • LCNG filling station licence. Licence applications must be made using Form No. 2 and accompanied by the documents and information prescribed under rule 13, including corporate documents,

tax identification details, business licence, premises information, aggregator consent, integrity pledge, relevant approvals, technical personnel qualifications, evidence of capability to operate and maintain Mini-LNG equipment and, where applicable, a commissioning report. An applicant may rely on the financial capability of its parent company where the arrangement has been approved by the parent company's board and the applicant provides evidence of either: • audited financial statements for the preceding three years showing annual gross turnover of not less than USD 10 million; or • a bank statement issued within three months before the application showing a credit balance of not less than USD 10 million.

Cross-border trade An applicant for a Mini-LNG supply and cross-border trade licence must provide additional information on: • the scope, volumes and timing of the proposed import or export; • the source, availability and security of the natural gas supply; • contract volumes and gas reserves supporting the project; • all participating parties and corporate affiliations; • base price, volume commitments, transportation arrangements, costs and price or cost adjustment mechanisms; and • evidence that the arrangement is competitive and not contrary to the public interest. For proposed imports, an approval certificate from the National Oil Company confirming the requirement for natural gas is required. For proposed exports, an approval certificate from the National Oil Company confirming the absence of national or regional demand is required.

Licence evaluation and validity The Authority may issue a conditional licence to an applicant that does not fully meet the licensing requirements. A licence application is subject to publication in two newspapers and public comments within fourteen days. The Authority shall determine a duly submitted licence application within sixty days. The Authority shall consider the applicant's legal, technical, economic and financial capacity, local content compliance, risk assessment, economic efficiency, public benefits, public representations and emergency preparedness. A licence may be refused where the application does not comply with the law, false or misleading information is provided, the applicant has relevant convictions, or the required integrity pledge is not executed. Licences are valid for five years, except for a Mini-LNG liquefaction licence, which is valid for twenty years.

A licence ceases to have effect if the licensed activity does not commence within six months from the date of issue. Transfer, ownership, renewal and revocation A licence cannot be transferred or assigned without the prior written approval of the Authority.

A change of ownership involving acquisition of a majority shareholding by a third party requires prior written approval. A change of operator requires prior written approval, with the application made at least thirty days before the proposed change. An application for renewal must be made at least six months before expiry and must include a valid tax clearance certificate, a valid gas sales agreement and a signed integrity pledge.

The Authority may suspend or revoke a licence for, among other matters, breach of licence conditions, false information, failure to comply with local content plans, unauthorised service interruption, tariff breaches, failure to submit information to the National Petroleum and Gas Information System, non-compliance with health, safety, service, quality or environmental standards, or convictions relating to corruption, money laundering, economic crimes or tax evasion. Obligations of licensees Licensees must comply with applicable laws, Authority directives, safety and environmental standards, licence conditions and best international petroleum industry practices. Licensees must also maintain insurance, customer service registers, accurate records, qualified personnel, emergency response plans and customer service mechanisms.

Licensees must charge tariffs or prices approved by the Authority and cooperate with inspections, investigations and monitoring. Information and records must be provided to the Authority when required. Information submitted to the Authority is not presumed confidential unless expressly stated as confidential, and confidentiality is determined by the Authority. Safety, environmental and operational requirements Licensees must prevent natural gas leakage and LNG spillage and notify the Authority in writing within twenty-four hours after discovering leakage or spillage. Failure to comply with an Authority remedial order may result in a fine of not less than ten million shillings, imprisonment for not less than two years, or both. A Mini-LNG facility must be fully insured against risks of loss, damage, injury or harm to property, the environment or public life.

Licensees must appoint a qualified health and safety officer, register and calibrate transport units, maintain seals, calibrate LNG dispensers and conduct daily leakage and functionality checks. Warning notices, safety signs and pictograms must be displayed in both Kiswahili and English. Licensees must submit quarterly returns on LNG sales and purchase volumes, an annual list of qualified personnel and an annual report. Dangerous situations, incidents, emergencies, leakage, breakage and spills must be reported to the Authority within twenty-four hours. Prohibition of unlicensed trading A person shall not: • sell, supply or trade in LNG without a valid licence; • provide LNG to a person, entity or facility that does not hold a licence; or • procure or receive LNG from an unlicensed person, entity or facility.

The prohibition applies to wholesale and retail transactions, domestic and cross-border trade, and any distribution, transfer, delivery or receipt of LNG. The Authority may take immediate enforcement measures, including seizure of LNG and suspension of operations. Inspection and enforcement The Authority may inspect facilities, premises, vehicles, vessels, equipment and documents; take samples; copy records; and inspect machinery and equipment. A licensee must not obstruct inspectors or fail to comply with their requirements or directions. A licensee must conduct an independent technical audit within three years from the date of issue of the licence. A Mini-LNG liquefaction plant licensee must conduct subsequent technical audits after four years from the first audit. The audit report must be submitted to the Authority and published on the licensee's official website.

The Authority may issue compliance orders, restrict activities, require remedial measures, suspend or revoke licences, and close a Mini-LNG facility in cases of noncompliance. Complaints, disputes and appeals A customer may lodge a written complaint with a licensee within sixty days of the incident or omission giving rise to the complaint. The licensee must acknowledge receipt within five working days and determine the complaint within twenty-one working days. A dissatisfied complainant may refer the matter to the Authority within thirty days from notification of the licensee's decision. Disputes may be submitted to the Authority for determination. A person aggrieved by a decision of the Authority may appeal to the Fair Competition Tribunal. The Schedule contains Form No. 1 for construction approval, Form No. 2 for a Mini-LNG activity licence, Form No. 3 for the integrity pledge, Form No.

4 for transfer of a licence and Form No. 5 for renewal of a licence. Conclusion In recent years, there has been an increased interest in Mini-LNG activities, with a number of investors seeking legal support in establishment of business operations. However, no legal framework existed, until now where Mini-LNG activities specifically addressed under the 2026 Rules. Accordingly, businesses involved in liquefaction, storage, regasification, supply and cross-border trade have clear requirements to consider. The Rules cover construction approval, licensing, operation, safety, environmental protection, reporting and enforcement, and prohibit the sale, supply, receipt or other trading of LNG without the required licence. For businesses looking to enter or operate in this sector, obtaining the relevant approvals and maintaining compliance will be essential.