Vicoba call for lower commercial borrowing costs

Dar es Salaam. Village Community Banks (Vicoba) are complaining over high interest rates charged by commercial banks on loans, saying the trend was thwarting investment efforts in the country.

Commercial banks in the country charge up to 25 per cent.

Speaking on Tuesday, the vice chairman for Tanzania Informal Microfinance Association of Practitioners vice chairman Abubakar Masoud said high borrowing costs were deterring investment in the country.

"Commercial banks should do their part to keep borrowing costs down," he noted.

Tanzania Association of Microfinance Institution chairman Joel Mwakitalu shared similar sentiments, asking the banks to understand that Vicoba were contributing a huge portion of the former's deposits.

"Large traders' money never remains in banks for long. It is ours which form a large portion of banks' deposit and so they should lend us at affordable costs" said Mr Mwakitalu.

He called on the government, through the banking regulator, to sit down with commercial lenders to address the challenge in question.