Tanzania: Microfinance Update: Delegation Of Powers And Functions

Application for registration – Regulation 5

• A member of the SACCOS shall apply for a licence to carry out microfinance business under category A or B

According to Regulation 13(1) of the Tier 3 Regulations, category A licence activities include:

1. making investments
2. granting loans to members
3. accepting savings from members
4. offering membership and voluntary shares

According to Regulation 13(2) of the Tier 3 Regulations, category B licence activities include:

1. all permissible activities under category A licence
2. accepting deposits from members
3. micro leasing
4. loan participation
5. agent banking
6. equity investment
7. micro insurance as an agent of insurers
8. offering debit cards

• An applicant must fill in the application form for a licence as set out in the First Schedule to the Tier 3 Regulations

Application for registration – Regulation 8

An applicant must fill in the application form for registration of a Community Microfinance Group as set out in the Second Schedule to the Tier 4 Regulations.

Documents for category A licence – Regulation 5(2)

An applicant must attach the following accompanying documents as prescribed in the Tier 3 Regulations:

1. certified copy of the current by-laws of the relevant SACCOS
2. certified copy of the certificate of registration issued by the Commission
3. full names and addresses of board members, supervisory committee members and SACCOS officers
4. curriculum vitae and certified copies of academic and professional certificates of board members and senior officers
5. copy of the lending policy
6. copy of the Tanzania national identity card, voters registration card, passport or any other identification document acceptable by the BoT or Commission for each board member and senior officer
7. two passport size photographs of each board member and senior officer
8. evidence of adequate safekeeping facilities and security for cash in the business premises
9. resolution of the general meeting resolving that the relevant SACCOS apply for a licence
10. proof that the SACCOS has employed or has contracted an internal auditor responsible for monitoring, among other duties, the correct and effective implementation of the internal control system
11. proof that the SACCOS has a Management Information System

Documents for category B licence – Regulation 5(3)

In addition to the documents listed under regulation 5(2) above, the applicant must attach:

1. a three (3) year business plan that includes:
   
   - the mission statement
   - organisational structure
   - products and services offered
   - branch expansion plans if applicable
   - strategy for growth
   - a statement of the projected financial position, income and cash flow, including the assumptions used to make the projections for the three years of operation
   
2. policies for investments, human resources, savings, liquidity, finance, collections and internal procedures and control manuals
   
3. evidence on adequate insurance coverage

Documents for Community Microfinance Groups – Regulation 8(1)

An applicant must attach the following accompanying documents as prescribed in the Tier 4 Regulations: two copies of the constitution duly signed by all members:

1. two copies of the minutes for each formation meeting (the first meeting where members agree on the purpose of forming and registering a Community Microfinance Group), duly signed by all members
2. members' resolutions resolving to form and register a Community Microfinance Group submitted through Form No. 1 as set out in the Second Schedule
3. proposed organisational structure and names of proposed leaders of the applicant
4. list of members, which can be between ten (10) and fifty (50) persons
5. proof of payment of membership subscription fees by the initial members
6. letter of reference from the ward or village authority introducing the applicant
7. any other information prescribed by the BoT from time to time

Determination of application – Regulation 6

Upon receiving a complete set of application documents, the Commission shall within 60 days approve the application.

Determination of application – Regulation 10

A Local Government Authority shall process and determine the application within 14 days of receiving a complete set of application documents.

1. To investigate or inquire into the operation of SACCOS
2. To inspect and examine books of accounts, records, returns and any other document of SACCOS
3. To demand information related to the activities of SACCOS
4. To provide instruction in relation to the proper management of SACCOS
5. To enter, at any reasonable time, into any premises of a SACCOS or any premises in which it is believed, on reasonable grounds, that books of accounts, records or documents in any form relating to the SACCOS' business are kept
6. To open or cause to be opened any strong room, safe or container in which it is suspected, on reasonable grounds, that there are any securities, books of accounts, records or documents of a SACCOS
7. To require any officer, employee or agent of a SACCOS to explain or furnish information or document(s) concerning a SACCOS
8. To exercise such other powers as may be necessary for the better performance of regulatory and supervisory functions under the Act as may be required by the BoT

1. To investigate or inquire into the operations of Community Microfinance Groups
2. To demand information related to the activities of Community Microfinance Groups
3. To provide instruction in relation to the proper management of Community Microfinance Groups
4. To visit and review, at any reasonable time, cash or records or documents in any form relating to the Community Microfinance Groups' business
5. To require any officer, employee or agent of a Community Microfinance Group to explain or furnish information or documents
6. To exercise such powers as may be necessary for the better performance of the regulatory and supervisory functions under the Act as may be required by the BoT

1. To issue licences to qualified SACCOS in accordance with the Act
2. To develop and manage a database for SACCOS
3. To inspect, monitor and evaluate the performance of SACCOS
4. To issue circulars and guidelines for SACCOS
5. To access and issue approvals for the transformation of SACCOS.
6. To ensure proper management of complaints relating to microfinance business
7. To ensure protection of consumers and members of SACCOS including sanctioning usurious lending practices
8. To ensure that SACCOS share credit information in accordance with the Credit Reference Bureau Regulations
9. To perform such other function as may be required by the BoT for the proper regulation and supervision of SACCOS

1. To register qualified Community Microfinance Groups in accordance with the Act
2. To develop and manage a database for Community Microfinance Groups
3. To monitor and evaluate the performance of Community Microfinance Groups
4. To issue circulars and guidelines for Community Microfinance Groups
5. To ensure proper management of complaints relating to microfinance business
6. To ensure protection of consumers of Community Microfinance Groups including sanctioning usurious lending practices
7. To ensure that community microfinance groups share credit information in accordance with the Credit Reference Bureau Regulations
8. To perform such other functions as may be required by the BoT for the proper regulation and supervision of Community Microfinance Groups