A report by the Legal and Human Rights Centre (LHRC) has urgently called for the government and stakeholders to expand women’s access to capital to protect them from predatory lending schemes, which the non-governmental organisation describes as a “major emerging human rights threat” in Tanzania.
Launched on May 5, 2025, the LHRC’s 23rd annual human rights report highlights the alarming spread of predatory lending schemes—locally known as mikopo kausha damu—which disproportionately target women of all ages as well as young men.
These loans, provided by individuals, microfinance institutions, and other digital lenders, are controversial due to their allegedly high interest rates and penalties, loan terms critics call “unfair, deceptive, and abusive,” and reported use of threats and violence to enforce repayment. The LHRC’s report urges stricter enforcement of microfinance regulations to address these concerns.
The report, which assesses Tanzania’s state of human rights in 2024, revealed that 70 per cent of respondents from the twenty regions of Tanzania Mainland surveyed characterised predatory lending as a problem affecting them personally and their communities, necessitating urgent interventions to address the issue.
Impacts
The most severe impact is property seizure, followed by financial distress, public shaming and humiliation, and family instability. The other consequences include sextortion, social stigma, and child neglect. Some victims reported cases of mental health problems, such as stress and depression, leaving them vulnerable to extreme consequences such as suicide
READ MORE: Tanzania’s Women Entrepreneurs Seek Alternatives to Predatory ‘Blood-Sucking’ Loans
In extreme cases, predatory lending can prove fatal. In 2024 alone, the LHRC documented at least two lending-related deaths in Dar es Salaam and Pwani regions. One case involved a woman who took her own life after being unable to repay a Sh30,000 loan.
In a separate incident, four employees of microfinance company OYA were arrested after being accused of killing 45-year-old Juma Said Seif in Pwani after his wife, Khadija Ramadhani, defaulted on her loan.
Some borrowers have been reported to have abandoned their families and fled their homes to escape relentless pressure from lenders, including frequent home visits. In Njombe, an LHRC-led focus group discussion with KKKT Church members in Makete revealed a common survival strategy: victims borrow from new lenders to repay existing debts, an approach that traps them in an inescapable cycle of debt.
Despite these severe consequences, some community members admitted they would still resort to predatory loans due to their easy accessibility.
“People understand the risks associated with predatory loans, but take them anyway because they are easy and fast,” one community member told LHRC. “Where else can you easily obtain cash when faced with an emergency? The lenders give you the money on the same day you apply for a loan.”
Common characteristics
READ MORE: Can Tanzania Afford a Universal Pension Scheme? Experts Think So
The LHRC report identifies common characteristics among female victims of predatory lending. Many are single mothers or widows, while others reported being used by their husbands as proxies to secure loans.
In regions like Singida, Pwani, and Tabora, women reported being compelled to take predatory loans when husbands failed to provide for their families. Many bear sole responsibility for household expenses—an overwhelming burden that heightens their financial vulnerability.
The LHRC further highlighted that gender-based wage disparities, particularly in industrial sectors, leave women financially vulnerable, forcing many to turn to predatory loans as a last resort to meet basic expenses.
The LHRC recognises the authorities’ efforts to address these concerns, including the Bank of Tanzania’s August 2024 guidelines, which set minimum criteria for digital lenders, require a no-objection letter from the bank, list prohibited activities, and mandate periodic reporting on digital lending operations.
The LHRC also commends regulators’ consistent enforcement of these guidelines, evidenced by the November 2024 ban on 69 unlicensed digital lenders and the arrest of alleged predatory lenders violating BoT regulations.
Systemic measures
However, the organisation views the problem as deeply systemic, arguing that enforcement alone is insufficient. It calls for a comprehensive, inclusive long-term strategy targeting both national poverty reduction and gender income inequality, key factors driving women’s vulnerability to predatory lending in Tanzania.
READ MORE: Bank Failures: Will the BoT’s Intervention on Insider Transactions Help?
“LHRC has observed that women’s vulnerability to predatory lending is mainly rooted in the lack of equitable access to educational and economic opportunities, trapping most women in the cycle of poverty and hindering their ability to achieve financial independence,” the organisation states poignantly in its report.
“Addressing this root cause is therefore crucial to rescuing women from predatory lending practices and escaping poverty, safeguarding their social and economic rights in the process,” it adds.
