Dar es Salaam. The Bank of Tanzania (BoT) and the NMB Bank are at risk of losing their right to defend themselves in a lawsuit filed by shareholders of Yetu Microfinance Bank (YMB), after failing to submit their written statements of defence (WSD) within the legally required timeframe.
The civil case, number 24650 of 2025, was filed by the Youth Self Employment Foundation (Yosefo), a major shareholder in YMB, through its registered trustees, Cornelius Kasiya Kariwa and Altemius Ambros Milinga.
They are challenging the central bank’s decision to take over and transfer the microfinance institution to NMB.
Failure of the two banks to submit their written statements of defence (WSD) within the legally required timeframe, puts them in danger of being denied the right to respond to the allegations.
The defendants are the Bank of Tanzania (first respondent), NMB (second respondent), and the Attorney General (AG), who has been joined as a necessary party because the case involves a government institution.
The plaintiffs are challenging BoT’s decision to seize the bank, citing capital inadequacy, and hand it over to NMB. They deny that the bank faced capital shortfalls, insisting BoT’s justification was unfounded.
The shareholders accuse the central bank of breaching the law and due process by taking over their bank without consent or compensation.
They are asking the court to order the return of the bank, payment of over Sh6 billion, damages, and other remedies.
The case is being heard by Judge-in-Charge of the High Court’s Dar es Salaam Sub-Registry, Justice Salma Maghimbi.
When the matter came up for mention on Wednesday, November 12, 2025, the court was set to review whether the defendants had complied with its order to file their written defences.
The plaintiffs’ lawyer, Mr Ibrahim Bendera, told the court that all the defendants had been duly served with the case documents — BoT and NMB on September 30 and the AG on October 2, 2025 — giving them ample time to respond.
He noted, however, that only the AG had filed a defence on time. BoT filed its statement late, while NMB had not submitted any response at all.
Mr Bendera asked the court to proceed with the case ex parte (one-sided hearing) against the first and second defendants.
State Attorney Catherine Kiiza, representing both the AG and BoT, admitted that BoT had filed its defence late but requested an extension of time, arguing that the bank is a government institution.
NMB’s lawyer, Mr Mrano Mlekano, also sought a one-day extension, claiming the recent election-related unrest had hindered him from completing the filing process.
He further explained that some crucial documents could not be accessed without clearance from NMB’s chief financial officer and BoT’s compliance unit.
However, Mr Bendera opposed both applications, arguing they lacked merit and urging the court to proceed with the case against the two defendants who had failed to meet legal requirements.
After hearing submissions from both sides, Justice Maghimbi adjourned the matter to November 18, 2025, for ruling and further directions.
Under civil procedure, a defendant who fails to submit a written defence within the stipulated time loses the right to be heard unless sufficient reasons are provided for the delay.
If the court finds BoT and NMB’s explanations unsatisfactory, BoT’s late submission could be struck out, and NMB’s request for an extension denied — effectively leaving the case to proceed without their defence.
According to court filings, Yetu Microfinance Bank had 12,350 shareholders and served more than 200,000 clients across eight regions in mainland Tanzania and Zanzibar.
The bank was listed on the Dar es Salaam Stock Exchange (DSE) on March 10, 2016, with a paid-up share capital of Sh6.056 billion.
As of June 30, 2022, YMB’s audited financial statements showed a sound financial position, meeting all statutory liquidity and capital adequacy requirements.
However, on September 28, 2022, BoT announced that YMB lacked sufficient capital, citing a Special Audit Report — which the shareholders claim was conducted unlawfully and without their participation.
In December 2022, BoT issued a preliminary takeover notice, stating that YMB’s capital position was negative Sh7.7 billion, despite acknowledging in the same report that as of June 30, 2022, the bank had a core capital of Sh6.79 billion.
Following that, YMB was placed under statutory administration and eventually handed over to NMB.
The plaintiffs maintain that YMB never suffered any capital deficiency and that BoT never ordered a recapitalisation. They insist the bank continued to meet its financial obligations, including lending to its clients, until the takeover.
They allege the process was conducted in secrecy and without integrity, resulting in both covert and overt abuses that undermined shareholder interests.
They further claim the bank was sold without competitive bidding, denying shareholders fair value for their investment and any opportunity to participate in the process.
The shareholders are asking the court to declare BoT’s takeover and subsequent transfer of YMB to NMB unlawful.
They are seeking Sh6.18 billion as compensation for the value of their investment, Sh2 billion in general damages, Sh3 billion in punitive damages, interest, and legal costs.
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