The micro finance service providers are governed by Bank of Tanzania, which gives license to operate within the country, existence of laws and regulations is to enable compliance of these institutions. The main services offered by the microfinance service providers are financial services like loans, savings, insurance products and financial literacy from banks, credit companies and digital lenders.

Microfinance service providers are institutions that offer financial services to individuals or small businesses that do not have access to standard financial services. These services often include loans, savings accounts, insurance, and financial education. The aim is to help clients improve their financial situation, start or grow businesses, and become economically self-sufficient. In 2025 there has been changes on approval requirement from the BOT on certain matters.

BEFORE

The regulation was silent on approval for changes made in its shareholding or ownership structure. In the Microfinance regulation approval is needed to change the place of operating a business, for the purpose of opening, relocating or closing of the place of business.

AFTER

An approval from the Bank of Tanzania is needed for any microfinance service provider seeking to effect any changes in its shareholding or ownership structure through request made to the Bank of Tanzania by the microfinance service provider changing the Shareholding or ownership structure stating the reasons thereof. The request is made by the person who owns /runs the business, leads, oversees the operations and decisions of a business. The documents needed to be accompanied with the request are:

A declaration of the source of capital and that the funds have not been obtained criminally or associated with any criminal activity

Proof of source of capital for foreign owners or shareholders

Board resolution authorizing change of ownership or sale of a company;

Credit reference reports of the new shareholder

Additionally, new ownership structures improve the institution’s overall direction and efficiency. By carefully managing changes in ownership and shareholding, microfinance providers can become strong and adaptable institutions through expansion this can make it easier to create new financial products and services that meet the changing needs of clients, leading to better service and greater client satisfaction.

The communicated changes helps build trust and strengthens the institution’s relationship with the community it serves by promoting ethical lending which is non- exploitative and protecting customers against risks that may occur in microfinance sector. Promotes accountability of these microfinance service provider by being transparent throughout on shareholding and ownership structure.

In conclusion, getting approval for changes in ownership and shareholding structures for microfinance service providers can bring many benefits that improve the institution’s effectiveness and sustainability. Accepting these changes can lead to a wider range on source of capital, which can strengthen financial stability and provide more resources for growth.

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