Dodoma. The government has denied allegations that it's over-regulating the microfinance sector and restricting low-income earners from accessing and small lenders to provide credit.
Deputy Minister for Finance and Planning Dr Ashatu Kijaji said a law was in place to address the challenges that surrounded the sector.
"Some of those challenges included high lending rates and absence of consumer protection mechanisms," said Dr Kijaji.
Last year, the Microfinance Act 2018 was passed to regulate microfinance firms, credit cooperatives and village saving banks which are now supposed to be registered with the Bank of Tanzania.
According to Dr Kijaji, regulations of the law were published on August 2, 2019 in the government gazette number 575 and provide one-year grace period to start applying.
Dr Kijaji was responding to a question asked by Ms Lucy Magereli (Special Seats-Chadema) who wanted to know the progress in implementing the microfinance law.
She also claimed that the government was over-regulating the sector.
However, Dr Kijaji said the law contained expectations of the sector stakeholders.
"It's my hope that the microfinance sector will now be regulated properly, accelerate its growth and conteibution to the economy and meet the stakeholders' expectations," she said.