Pay up or face law, TWB to defaulters

Dar es Salaam. The Tanzania Women Bank (TWB) has issued a seven-day ultimatum for its defaulting clients to repay the loans or face legal action, including taking them to court.

Bank’s board chairperson Beng’i Issa said TWB has over Sh7.9 billion in non-performing loans (NPLs), which, she said, were hindering it in the endeavour to raise capital as directed by the Bank of Tanzania (BoT).

“As it is known, we’ve been given six months by the BoT to raise capital but the process has been compounded by a burden of over Sh7.9 billion in NPLs,” she said.

According to her, the money is yet to be paid by 7,065 customers, mostly city based.

In January, the BoT closed Covenant Bank for Women, Efatha Bank, Njombe Community Bank, Kagera Farmers’ Co-operative Bank and Meru Community Bank due to undercapitalisation after the five lenders failed to raise Sh2 billion.

Three other banks namely, Kilimanjaro Co-operative Bank, the state-run Tanzania Women’s Bank Plc and Tandahimba Community Bank were given until June 30 to raise the Sh2 billion capital or have their licences revoked.

Ms Beng’i Issa said that TWB’s defaulting clients - who fail to repay their loans within the seven-day period – will face legal action and have their names presented to credit reference bureaus so they can be barred from taking new loans from other lenders.

Until 31st December 2017, said Ms Beng’i Issa, the bank had filed 43 court cases in the endeavour to collect Sh1.8 billion.

Bank’s managing director Japhet Justin said after undertaking some deliberate measures to collect the money, they have managed to amass a total of Sh1 billion in six months.