Tanzania Targets Bank Employees in Push to Curb Bad Debt

Tanzania’s central bank is targeting lenders’ employees deemed responsible for approving non-performing loans in a bid to crack down on losses and boost credit to the private sector, Bloomberg News reported. An employee who issued loans fraudulently or without following due procedures will face legal action, Bank of Tanzania Governor Florens Luoga said in a statement. The central bank “will blacklist the concerned employees and bar them from being employed in any bank or financial institution operating in Tanzania,” Luoga said. The ratio of non-performing loans in the East African nation fell to 9.42% in 2020 from 9.58% a year earlier, but remains above the central bank’s target of 5%. Meanwhile, lending to the private sector increased by 3.2% in the year to August -- less than twice the previous annual growth rate. The central bank has been implementing accommodative monetary policy measures, with a view to increase financing for homes and businesses. The government expects the economy to expand 5.2% in 2022 from a projected 5% this year. Read more.