Buying a bajaji or motorcycle on credit in Tanzania

Which of three deals are you being offered?

Maybe you have spent two years riding someone else's boda boda, handing the owner his hesabu, the fixed sum due at the end of each day. Now a dealer in town says you could own one for a deposit and a monthly installment (rejesho). Before you sign, find out which of three deals is on the table. They differ on whose name the bike carries until the last payment, and on which rules protect you.

• A loan secured on the bike. The lender pays the dealer and the bike stands as collateral (dhamana) for the loan. If the lender is Tier 2 (a microfinance lender that takes no deposits and holds a Bank of Tanzania licence), GN 679, the rulebook the Bank issued for such lenders in 2019, requires the agreement to include a notice of that security interest (Regulation 39(2)(j)).
• A lease or hire-purchase. The lender buys the bike and lets you use it while you pay. Regulation 21(e) of GN 679 allows a Tier 2 lender to operate "micro leasing facilities" and "micro finance related hire-purchase". The Microfinance Act 2018 defines micro leasing as finance leasing where the average value of the assets in the portfolio is up to TZS 10 million and the term does not exceed 24 months (section 3).
• A private work-to-own deal. A bike owner lets you ride and hands the bike over after an agreed number of payments.

The borrower rules quoted below bind licensed lenders. Most come from GN 679, which covers Tier 2 lenders only (Regulation 2). Its parent law, the Microfinance Act, applies on the Mainland (section 2), so if you live in Zanzibar, check which rules cover your lender. A private owner is bound by none of them, and the written contract (mkataba) has to say everything: the number of payments, what happens after a missed week, and the date the card moves into your name.

Two checks come before any money moves. First, confirm the lender is licensed. Second, if the bike is used, have it looked at by a mechanic you trust rather than the dealer's, because the installments fall due whether the engine runs or not.

A worked example: a TZS 3.2 million boda boda

Say the dealer's cash price for a new motorcycle is TZS 3,200,000 and a Tier 2 lender offers the terms below. These figures are an example, not a market rate. There is no official typical rate for bike loans in Tanzania, so work from the numbers in your own written quote.

On credit, this bike costs TZS 789,016 more than its cash price: the fee plus the interest. The installment stays the same each month, but its make-up shifts. In month 1, TZS 72,000 of it is interest and TZS 102,501 reduces the debt. By month 18 the interest share has fallen to TZS 5,083.

Now suppose someone quoted the same 3% a month flat, charged on the full TZS 2,400,000 every month. The installment would be TZS 205,333 and the interest TZS 1,296,000, which is TZS 554,984 more, and the effective rate would be 85.0%.

A lender the Bank licenses or supervises may not do this. Regulation 11(4) of the Financial Consumer Protection Regulations, as rewritten in 2025, requires the reducing balance method unless the Bank prescribes otherwise. A private seller is not bound by that rule, so check the method in any quote. Tier 2 lenders carry a further duty under Regulation 39(2): the agreement must name the interest computation method (item g) and give a yearly rate that already includes every fee (item d). What a loan really costs explains flat and reducing interest in full, and the loan calculator will run your own quote.

Should you repay over 12, 18 or 24 months, or weekly?

Stretching 18 months to 24 lowers the monthly payment by TZS 32,787 and adds TZS 260,115 of interest. The yearly rate even falls a little, only because the fixed TZS 48,000 fee is spread over more months, so don't read a lower rate as a cheaper loan: look at the total.

Weekly payments fit an income that comes in daily cash. Because the balance falls a little sooner, the interest here is TZS 26,877 lower than paying monthly. The effective yearly rate is slightly higher, though (47.4%), because interest is worked out every week.

The weekly row assumes the lender turns 3% a month into 36% a year and divides it over 52 weeks. Ask how yours does it, and ask to see the full weekly schedule before you sign.

Will the bike earn its own installment?

Three numbers decide it: what the bike brings in, what it costs to run, and the installment. Use a working rider's real takings, not the figure from the person selling the bike. The table sets the 18-month loan against two invented months for a Mwanza rider who rides his own bike. The insurance premium is also an example: TZS 120,000 a year.

Eight lost days can come from the long rains, a week in the garage or a spell of malaria. In the bad month the loan still gets paid, but the household lives on TZS 75,666.

If you plan to hire a rider, the margin is thinner. Say he hands you TZS 12,000 a day as hesabu and buys his own fuel. In a 26-day month you receive TZS 312,000. After upkeep and the licence and insurance share, TZS 220,167 is left, or TZS 45,666 once the installment is paid. In an 18-day month you are TZS 50,334 short. On these figures you need at least 23 days of hesabu a month just to cover the loan and the bike's running costs.

Put the rider arrangement on paper, even one page: the daily amount, who buys fuel, who pays for damage and traffic fines, and what happens on a day with no work. Then run your own figures through the affordability calculator, which shows how much of an income a repayment can safely take.

The LATRA licence, and whose name is on the card

LATRA, the Land Transport Regulatory Authority, licenses two- and three-wheeled motorcycles used for commercial hire. Its licence page, posted on 12 May 2023 and still live on 28 September 2026, sets out these steps:

1. Open RRIMS, LATRA's online system, at rrims.latra.go.tz and log in with your email address and password.
2. Choose "Maombi ya leseni", then "Bodaboda/Bajaji", then "Ongeza gari".
3. Fill in the details, attach a copy of the motorcycle's registration card, and submit the application to the LATRA office you choose.
4. LATRA says it processes applications within 24 hours and then issues a control number.
5. Pay against the control number by M-Pesa, Tigo Pesa, Airtel Money, HaloPesa or T-Pesa, or at a bank or bank agent. Then print the licence from your RRIMS account.

LATRA's site also carries a notice that amended regulations took effect on 1 July 2026. The amount on your control number is the one to pay, so check it against the table.

The online form asks you to attach a copy of the registration card (kadi ya usajili), so a lender holding the original need not stop you applying or renewing online. Ask for a clear copy on the day you sign.

The name printed on the card matters more. TRA's online vehicle register (the Central Motor Vehicle Registration System in its IDRAS portal) has two fields for every vehicle, an owner and a titleholder, which can name different people, and it has separate steps for changing each. Ask the lender whose name will go in each field during the loan and what it will do to change them when you finish, and get both answers on paper.

Insurance: the legal minimum, and what the lender adds

Section 4(1) of the Motor Vehicles Insurance Act, Cap 169, makes it unlawful to use a motor vehicle on a road, or to cause or permit anyone else to use it, unless a policy covering third-party risks is in force for that person's use. If you hire a rider, the policy has to cover him riding it, not only you.

Section 5 sets what the policy must cover: liability for death or bodily injury to any person caused by the vehicle's use on a road. It lets a policy leave out people riding on the vehicle, except where passengers are carried for hire or reward (or under a contract of employment). A boda boda or bajaji that takes paying passengers therefore needs a policy that covers them. (Both sections are from the revised text as at 31 July 2002, published by TanzLII.)

That minimum protects other people. It pays nothing towards your own bike if it is stolen or burnt, and the loan is still owed. Before signing, get answers to these:

• Does the agreement require third-party cover only, or comprehensive cover that includes theft?
• Is the insurance (bima) premium added to the loan, and which insurer is it? Under guideline 14 of the Bank's 2024 fee rules, a Tier 2 lender may charge you no more for insurance than the premium the insurer itself bills. Where no licensed insurer stands behind the cover, the lender may charge nothing for it.
• If the bike is stolen or written off, does any policy pay off the loan, and how much?
• Is there credit life cover, and what does it pay if you die or cannot work? The terms of any product sold with a loan must be disclosed to you (regulation 26(1)(e) of the Financial Consumer Protection Regulations 2019).

Trackers, missed payments and taking the bike back

A lender may fit a tracking device and pass the cost on to you, but guideline 13(6) of the Bank's 2024 fee guidelines caps that charge at what the lender actually paid the supplier. Ask for the receipt. If the lender says it can also switch the engine off remotely, get the conditions in writing: after how many days of arrears, and after what warning.

Regulation 44(2) treats the whole of an installment loan as past due when a single installment is one day or more overdue. Collection or recovery may not begin until you have had 14 days' notice in writing (56(2)(a)), and the lender may not threaten or use violence or illegal means (56(2)(c)).

GN 679 sets two notice rules for a sale: 60 days after a written demand for mortgaged property (41(3)), and for other collateral the notice your agreement sets (41(4)). It does not say which one covers a vehicle, so find the notice clause in your agreement, see how many days it gives, and ask the lender in writing which rule it is relying on.

Before a sale, a registered independent valuer has to value the bike at both its market price and its forced sale price, and any money left once the debt and the sale costs are covered belongs to you (41(6) and (8)). Collateral: what you can lose takes a motorcycle sale through in figures. The 2024 fee guidelines ban charging borrowers "chattel storage and management cost" (17(2)(e)), so question any yard fee for a repossessed bike.

Tell the lender early. Three weeks in the garage is a cash-flow problem, and for a borrower in that position GN 679 allows a Tier 2 lender to change the installment or the length of the loan, within its own lending policy (Regulation 43). Ask in writing and keep a copy. Our guide to missed payments sets out the full timeline after a late installment.

Can you clear the loan early?

With a Tier 2 lender, yes. You may repay the bike loan before its end date, in full or in part, without warning the lender first and without being penalised (Regulation 42(3)). Settle it in full and the months you skip carry no interest (42(4)).

If your agreement names an early-settlement fee, check it against fees a lender cannot charge: the Bank's 2024 fee rules allow one only when the agreement states it (guideline 15). The saving below assumes no fee.

In the example, clearing the loan after 12 installments means paying the TZS 945,305 balance instead of six more installments totalling TZS 1,047,005, about TZS 101,700 less.

After the last installment: getting the bike into your name

Keep the final receipt and ask for two things. Under regulation 29 of the Bank's consumer protection regulations, as changed in 2025, the lender owes you a signed statement that the debt is cleared, and where security was given it should confirm the release. The same regulation gives the lender 30 days from your final payment to have the collateral discharged and handed over. For a bike loan, ask for this to include the original card and any spare key the lender holds.

If the lender or anyone else appears as owner or titleholder, the change goes through TRA. For an individual, TRA's motor vehicle registration page lists a sales agreement (or a deed of gift or a mortgage deed), a lawyer's EFD receipt, an application letter and the buyer's Tax Identification Number (TIN). If you have no TIN yet, get one before the last month.

TRA defines a motorcycle as a motor vehicle with fewer than four wheels and an unladen weight of no more than 400 kilograms, so for a bajaji ask TRA which transfer rate applies.

If 30 days pass without the card, or the lender will not give you the declaration, write to its complaints desk or complaints officer. Every Tier 2 lender must have one or the other and display the contact details at its offices (Regulation 54). If that gets no answer, complain to the Bank through Sema na BoT.

Sources

• Kuomba Leseni za Usafiri wa Kukodi: Pikipiki za magurudumu mawili na matatu (licence steps and fees, posted 12 May 2023) — LATRA
• Motor Vehicle Registration (definitions, transfer fees, duplicate card fees, change-of-ownership requirements) — Tanzania Revenue Authority
• Motor Vehicles (Tax on Registration and Transfer) Act, Cap 124 R.E. 2023 (section 9, Second Schedule) — Tanzania Revenue Authority
• Central Motor Vehicle Registration System (IDRAS) user guide: owner and titleholder, change of ownership and change of titleholder — Tanzania Revenue Authority
• Motor Vehicles Insurance Act, Cap 169, as at 31 July 2002 (sections 4 and 5) — TanzLII
• Microfinance (Non-Deposit Taking Microfinance Service Providers) Regulations, 2019, GN 679 (Regulations 2, 21, 39, 41–44, 54, 56) — Bank of Tanzania
• Microfinance Act, 2018 (sections 2, 3 and 5) — Bank of Tanzania
• Guidelines on Fees and Charges for Microfinance Service Providers, 2024 (guidelines 13(6), 14, 15 and 17(2)(e)) — Bank of Tanzania
• Bank of Tanzania (Financial Consumer Protection) Regulations, 2019, GN 884 (regulations 26 and 29) — Bank of Tanzania
• Bank of Tanzania (Financial Consumer Protection) (Amendment) Regulations, 2025, GN 298 (regulations 2, 11(4) and 29) — Bank of Tanzania
• Sema na BoT, the Bank of Tanzania's complaints portal

What changed

• 29 September 2026: Rewritten and moved to the "life" category. Corrections: removed the unsourced claims that asset finance is the most common large loan a trader takes, that deposits are "often a quarter to a third" of the price, that terms run "one to three years", that the lender commonly holds the registration until the last payment, that many asset loans come with trackers, that most owners hire a rider, and that a new vehicle usually comes with a warranty and service plan; the worked example now states its own assumptions instead. Replaced the open question about whether repossession needs a court order with the rules GN 679 actually sets for Tier 2 lenders: past due after one day (Regulation 44(2)), 14 days' written notice before recovery and no threat or use of violence or illegal means (56(2)(a) and (c)), the two notice rules before a sale (60 days after a written demand for mortgaged property under 41(3); for other collateral, the notice in the agreement under 41(4); GN 679 does not say which one covers a vehicle), independent valuation and the balance paid to the borrower (41(6) and (8)). Added: the three kinds of deal, including micro leasing and hire-purchase (Regulation 21(e); Microfinance Act section 3); a full TZS 3.2 million worked example with a term and weekly-payment table; a flat-rate comparison, with the rule that a lender the Bank licenses or supervises must use the reducing balance method (consumer protection regulation 11(4), as replaced in 2025, GN 298); a monthly cash-flow table for an owner-rider and the same figures for an owner with a hired rider, counting LATRA's application fee each year; LATRA's licence steps and fees (TZS 2,000 application; TZS 20,000, 30,000 or 50,000 a year; TZS 10,000 to change owner details); TRA's owner and titleholder records, change-of-ownership documents, the TZS 27,000 motorcycle transfer tax paid by the transferee and its late penalty (Cap 124 section 9(1)), and duplicate card fees; compulsory third-party insurance and passenger cover (Motor Vehicles Insurance Act sections 4 and 5); fee rules for trackers, insurance and storage (fee guidelines 13(6), 14, 17(2)(e)); restructuring (Regulation 43); early repayment without penalty (42(3)–(4)) and the rule that an early-settlement fee may be charged only if the agreement states it (fee guideline 15); the settlement declaration and 30-day discharge and handover of collateral (consumer protection regulation 29 as amended in 2025); the lender's complaints desk or officer (Regulation 54); links to the loan and affordability calculators.
• 23 September 2026: First published.

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