Before you sign: questions to ask, papers to get

Written by the Kopesha team at Softsamic Company · Published 19 September 2026 · Updated 29 September 2026 · 12 min read · No lender pays for these guides · How we write and check them

Which rules does your lender have to follow?

The officer has printed the agreement, marked the places to sign and turned it towards you. Until you sign, you can still ask for a figure to be explained, a fee to be struck out or a copy to take home. Afterwards you are living with a contract (mkataba wa mkopo).

Most of the answers below are not favours the lender may refuse. Two sets of rules put them on paper.

Tier 2 lenders. The Microfinance (Non-Deposit Taking Microfinance Service Providers) Regulations, 2019 (Government Notice 679) apply to every microfinance lender the Bank of Tanzania has licensed under Tier 2, credit companies, individual money lenders and digital lenders among them. Their parent law, the Microfinance Act 2018, covers Mainland Tanzania only (section 2), and the Bank's 2024 fee guidelines cover Tier 2 lenders operating in Tanzania Mainland (guideline 4).
Anyone the Bank licenses or supervises. The 2019 Bank of Tanzania (Financial Consumer Protection) Regulations (GN 884) were amended by GN 298, published on 23 May 2025. Their Regulation 2, in the wording GN 298 gave it, reaches every provider that the Bank licenses, and every provider it supervises and regulates, unless the Bank prescribes otherwise. Banks are bound by them as well as microfinance lenders. Regulation 58 of GN 679 separately tells Tier 2 lenders to obey the consumer protection laws.

A SACCOS or a VICOBA group works under its own regulations; see choosing between VICOBA, a SACCOS and a microfinance lender. So before you spend time on the questions, confirm that the Bank has put this lender on its Tier 2 register. How to check a lender's licence shows how. Kopesha's directory lets you search that register by region and district; a lender marked "Not on the register" added itself and is not on it.

Fourteen questions, and the rule behind each answer

Read these off your phone at the desk and write down each answer as the officer gives it. The last column is the rule that obliges a Tier 2 lender to answer. "Reg" means GN 679; "FCP" means GN 884 with its 2025 amendments.

What to ask, what a proper answer looks like, and where the rule is

Your question	A proper answer	The rule
How much is the loan, and how much reaches my hand?	Two figures in shillings: the loan amount, and the cash paid to you after anything deducted	Reg 39(2)(a) and (c)
What is the yearly interest rate?	A stated annual rate, such as 36% a year, and not only "3% a month"	Reg 39(2)(b)
What is the effective annual rate with every fee counted?	One percentage that includes all fees	Reg 39(2)(d); FCP 26(1)(d)
How is the interest worked out?	On the reducing balance	Reg 39(2)(g); FCP 11(4)
How many installments, of how much, on which dates?	A schedule with each installment split into principal, interest and fees, and its due date	Reg 39(2)(e)
What will I have paid when the loan is cleared?	One total in shillings	Reg 39(2)(f); FCP 26(1)(d)
Which fees are there, by name?	Each fee, its amount, and whether it is deducted at payout or added to the installments	Reg 39(2)(c); FCP 23(2); fee guideline 13(2)
Is there insurance, with which insurer, at what premium?	The insurer, the premium and the policy terms	Fee guideline 14; FCP 26(1)(e)
What happens if I pay late?	The penalty exactly as the agreement states it	Reg 39(2)(h); fee guideline 16
What recovery costs could be added if I default?	Every debt recovery fee, charge or expense, written in the agreement	Reg 39(2)(i); Reg 56(3)
What am I pledging, and what notice comes before a sale?	A notice of the security interest, and the notice period	Reg 39(2)(j); Reg 41(3) and (4)
Can I repay early, and does it cost anything?	Yes, in whole or in part, without advance notice	Reg 42(3) and (4); fee guideline 15
Can I have the agreement in Kiswahili?	Yes: English or Kiswahili, whichever you prefer	FCP 15(3)
Where do I complain, and how quickly will you answer?	A complaints desk or named officer, a phone number or email, and a time frame	Reg 54; FCP 23(1)(f) and (g)

Regulation 39(2) ends with two more items: the signatures of both you and the lender (k), and any other disclosure the Bank directs (l). Look for the lender's signature on the copy you keep, not only on theirs.

The interest method matters because a flat rate charges interest on money you have already repaid. What a loan really costs shows the difference in shillings and the 2025 rule that now requires the reducing balance.

Some fees are banned outright for a Tier 2 lender, among them administrative fees and fees for loan statements (fee guideline 17(2)). Fees a lender cannot charge lists the other banned items and the fees that are allowed.

On early repayment, Regulation 42(3) says a Tier 2 lender may not penalise you, while fee guideline 15 allows an early settlement fee only where the agreement clearly states one. If your agreement names such a fee, ask the officer before you sign how it squares with Regulation 42(3). Your rights as a borrower sets the two rules side by side.

What the figures look like on a real offer

Say a tailor in Morogoro is offered TZS 600,000 over six months at 3% a month on the reducing balance. The lender takes a management fee of TZS 15,000 from the payout. A complete agreement for that loan would show figures like these.

Hypothetical loan: TZS 600,000, 3% a month reducing balance, 6 monthly installments, TZS 15,000 fee deducted

Item in Regulation 39(2)	Figure
(a) Loan amount	TZS 600,000
(c) Fees	Management fee TZS 15,000, deducted at payout
Cash in your hand	TZS 585,000
(b) Stated annual rate	36% (3% × 12)
(e) Installments	6 monthly payments of about TZS 110,759
(e) First installment split	Principal TZS 92,759 + interest TZS 18,000
(e) Last installment split	Principal TZS 107,533 + interest TZS 3,226
(f) Total of all payments	TZS 664,551
(d) Effective annual rate, fee included	About 55.9%

The loan costs TZS 79,551 in all: TZS 64,551 of interest plus the TZS 15,000 fee. That is the gap between the TZS 585,000 you receive and the TZS 664,551 you pay back.

Two things push the effective rate above the stated 36%: interest compounds month by month, and you pay interest on TZS 600,000 while holding only TZS 585,000. What a loan really costs works through both.

To test an offer of your own, enter it in Kopesha's loan calculator. If a fee is being deducted and the agreement still gives an effective rate at or near the stated rate, ask the officer how that figure was worked out.

Can you take it home first, or cancel after signing?

Yes, within limits the lender has to tell you. Regulation 14(4) of the consumer protection regulations requires a provider to give you a reasonable reflection period and a cooling-off period, and to disclose both in writing.

The cooling-off period is time after the contract is agreed in which you may cancel it without a penalty (14(6)). The regulations do not define the reflection period, but because the cooling-off period starts only at signing and may not overlap it (14(5)), the reflection period is the time before you sign.

Regulation 14 does not say how many days is reasonable. So ask: "How long is my reflection period, and how long is the cooling-off period?" and ask for the answer on paper. Use the reflection period to show the agreement to someone you trust or to set it beside another offer.

Pressure to sign on the spot can amount to an aggressive sales practice, which Regulation 12(1)(b) forbids along with mis-selling and misrepresentation. Regulation 22(6) requires clear information on a product's features before you sign up for it.

The key facts statement: the page to read first

A long agreement is hard to read at a desk. The key facts statement is meant to fix that. Regulation 27(3) describes it as a simple, standard summary of a product's key contractual information.

Under Regulation 27(1), the lender must produce one for its product and give it to you, through at least the channel the product is offered through. It must attach a copy signed by you to the agreement, and keep copies itself. Regulation 27(2) sets its minimum standards: plain language, a standard way of stating the all-inclusive total cost, and standard formats.

Ask for the key facts statement before the agreement, and read it first. Then check that its loan amount, fees, installment and total match the agreement exactly. If they differ, the time to have it corrected is before you sign either document.

If a word in either document means nothing to you, ask what it means and have the answer written beside it. Regulation 15, as rewritten in 2025, bars unclear technical terms in an agreement and, where a technical term has no plain substitute, requires the provider to explain it clearly. Regulation 53 of GN 679 adds that a Tier 2 loan agreement must be legible and in simple, understandable language.

Papers you should hold, from signing to the last installment

Regulation 22(5) says documents such as agreements, forms, receipts and statements must reach you in writing. These are the main ones, and when each should arrive.

Papers a borrower is owed, and the rule for each

Paper	When	Rule
Your copy of the signed agreement and forms	At signing	FCP 22(5)
Key facts statement, signed by you and attached	At signing	FCP 27(1)(c)
Receipts (risiti) for your payments, in written form; from an app, an e-receipt or instant message for each transaction	When you pay	FCP 22(5); Guidance Note 5.1(g)
Written statement of your account, free of charge	At least once a month	FCP 28(1)(a); fee guideline 17(2)(d)
Your balance	Whenever you ask	FCP 28(1)(c)
Written notice of a change to the interest rate, a charge or a key term such as prepayment	Before the change	FCP 30(1)
Closing statement	When the agreement ends	FCP 28(1)(b)
Written declaration that the loan is fully settled	When you finish paying	FCP 29(1) and (2)
Your collateral (dhamana), discharged and handed back	Within 30 days of full settlement	FCP 29(3)

A statement should show each transaction's value and date, the balance at the start and end of the period, the rate of interest, fees and penalties charged, and any coming risk or change of terms (Regulation 28(5)). Compare it with your receipts; reading your repayment schedule shows what to do when a payment is missing.

Since 2025 the settlement declaration has a minimum content, set by a new Regulation 29(2). It must give the lender's name and contact details, your name, a clear statement that the obligation is fully settled and the date it was settled. Where relevant it should confirm that your security is released. It must also carry the name, position and signature of the lender's authorised representative. A "paid" scribbled on your repayment card leaves out most of those details, so ask for the declaration itself.

If you lose a document, a Tier 2 lender may charge for photocopies of loan documents and for retrieving them, but no more than the actual cost (fee guideline 18(3)).

Papers for the application, a refusal and your guarantor

Before the agreement comes the application form. Regulation 38(2) requires it to include your consent that your credit information may be shared. A Tier 2 lender then reports every loan to the credit bureaus each month (Regulation 35(2)). Your free credit report explains how to see what they hold.

If the lender turns you down, Regulation 40 gives it seven days to tell you why. Improving your chances covers what to do with the reasons.

If someone is guaranteeing your loan, they are owed a paper too. Regulation 55 requires the lender to give the guarantor (mdhamini) a written disclosure statement of their liability, showing:

the lender's name and address
the loan number
your name as borrower
the loan amount
the date the loan was granted
the guarantor's signature

Tell your guarantor to ask for it. Collateral: what you can lose sets out what a guarantor and a pledged asset are exposed to.

Signing on a phone instead of paper

A loan app replaces the desk with a few screens, and the questions still apply. Paragraph 5.1(d) of the Bank's 2024 guidance note for digital lenders says the app's loan agreements must follow Regulation 39(2) of GN 679 and Regulation 22(5) of the consumer protection regulations. So the answers that Regulation 39(2) requires should appear in the agreement on screen. Take a screenshot of the terms page before you tap accept.

Two more rules in paragraph 5.1 matter at the moment you accept. Interest cannot be demanded from you upfront, or at any time before the repayment due date (5.1(p)). Nor may the lender behind the app use a guarantor without a way to get that person's consent and give them a written statement of their liability (5.1(o)).

Is this loan app approved? walks through the Bank's approved and unapproved lists and what an app's screens must display before you apply. What phone loans cost turns a fee charged over a few days into a yearly rate.

When the paper does not match what you were told

Stop before signing and deal with it in this order:

Point to the line that differs and ask for a corrected agreement. A figure promised aloud is hard to prove later. Regulation 56(3) bars a lender from collecting any interest, fee, charge or expense that the agreement does not prescribe, so the written figure is what counts.
If the lender will not give you a copy, a key facts statement or an answer, write down the date, the officer's name and what was refused.
Ask for the complaints desk. Under Regulation 54, each Tier 2 lender must display its complaints procedure and contact numbers or email in its offices, in Kiswahili or in Kiswahili and English.
If the lender does not put it right, the Bank hears complaints through Sema na BoT. The deadlines for the lender's reply, and then the Bank's, are listed in the guide to borrower rights.

Once you have signed, keep paying the installments (marejesho) that fall due while a complaint is dealt with. One installment left unpaid for a single day puts the entire loan past due (GN 679, Regulation 44(2)), and the missed-payment timeline shows what follows. If the real problem is that you cannot pay, ask the lender in writing for a restructure under Regulation 43; the guide to debt you already have explains how.

Sources

What changed

29 September 2026: Rewritten as a checklist that matches each question to the rule behind it, and moved to the rights category. Corrected the early-repayment answer: we said early settlement on flat interest "often saves nothing" and that some lenders charge for it; under Regulation 42(3) and (4) of GN 679 a Tier 2 borrower may repay early, in whole or in part, without advance notice or penalty, and owes no interest for the remaining period after a full payoff, and fee guideline 15 (2024) allows an early settlement fee only if the agreement clearly states it. Corrected the interest-method answer, which treated flat interest as a lender's free choice: since the 2025 amendment, Regulation 11(4) of the consumer protection regulations requires the reducing balance. Removed the unsourced claim that flat interest can cost a third of the amount borrowed more on a six-month loan. Corrected the fees answer, which listed statement fees as a normal charge: fee guideline 17(2)(d) bans Tier 2 lenders from charging for loan statements, and Regulation 28 makes periodic statements free. Replaced the late-payment answer with the rule that a penalty may be charged only if the agreement provides for it (fee guideline 16; Regulation 56(3)), and the collateral answer, which asked whether a court order is needed, with the notice rules in Regulation 41(3) and (4). Added the papers a borrower is owed under the consumer protection regulations as amended in 2025 (key facts statement, reg 27; free monthly statements, reg 28; notice of changes, reg 30; settlement declaration and its contents, and collateral returned within 30 days, reg 29), the reflection and cooling-off periods (reg 14(4)–(6)), the Kiswahili contract choice and the ban on unclear technical terms (reg 15 as rewritten in 2025), fee disclosure before any transaction (reg 23(2)), the guarantor's disclosure statement (GN 679 reg 55), refusal reasons within seven days (reg 40), the application-form consent to credit reporting (reg 38(2)), what the Bank's digital lenders guidance note requires of a loan app's agreement and forbids at signing, including interest taken upfront (Guidance Note 5.1), a worked TZS 600,000 example of a complete agreement's figures, and the Mainland-only scope of the Microfinance Act.
24 September 2026: Added references to the Bank of Tanzania's regulations and a list of sources.
19 September 2026: First published.

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This guide is general information about borrowing in Tanzania. It is not legal or financial advice about your situation or about any particular lender, and the worked examples are examples, not a quote or an offer from anybody.