How does a Bank of Tanzania credit guarantee work? The Bank of Tanzania guarantees part of a loan that a registered bank or financial institution has already appraised. The borrower does not apply to the Bank of Tanzania. The lender does. Cover is up to 75% or 50% of principal under the export scheme and up to 50% under the SME scheme. It covers principal only, not interest.
What changed
On 5 November 2026 a Bank of Tanzania official told a journalists' seminar that the Bank has facilitated loans of TZS 2.1 trillion through guarantees worth TZS 1.6 trillion under two government-backed schemes, as reported by The Respondent Online. The same report says banks pay a 1% fee on the amount covered and that the schemes are not an exemption from normal lending requirements.
The news arrives while three other changes are moving. A draft Banking and Financial Institutions (Credit Guarantee Corporation) Regulations, 2026 is published on the Bank's website. A new law on movable assets as security for loans was reported as gazetted on 2 October 2026 but not yet in force. The Finance Act 2026 raised stamp duty on bills of sale given as security. This guide separates what is confirmed from what is still reported.
Fursa365 does not lend, guarantee loans or hold money. It matches qualified idle assets, skills and capital with demand verified by Zatra Consultants Limited. A guarantee matters to Fursa365 users because many asset owners and operators need bank finance to run a project, and the bank's collateral rules decide whether it happens.
Who should read this
Owners of small and medium businesses that have a viable project but too little acceptable collateral. Farmers' groups and agro-processors that sell under offtake contracts. Truck, equipment and warehouse owners who want to finance a conversion or an upgrade. Bank and microfinance credit officers who read these files. Advocates and accountants who prepare a client's loan file.
How do the two guarantee schemes work?
The Bank of Tanzania page on financial deepening describes two schemes. The Export Credit Guarantee Scheme, ECGS, started in July 2002. The Small and Medium Enterprises Credit Guarantee Scheme, SMECGS, started in September 2005, according to the 5 November report. The Bank's own page is in Swahili and carries no date, so this guide reads it as the current description.
Under the ECGS the guarantee is up to 75% of a loan repayable within one year and up to 50% of a loan repayable over one year. Crops with a 12 to 15 month cycle are also covered at up to 75%. Under the SMECGS the guarantee is up to 50% of the loan, for loans of TZS 50 million to TZS 1 billion over one to five years. The guarantee covers principal only, not interest.
A National Financial Inclusion Framework mid-term report hosted by the Bank, dated June 2026, says the Bank's credit guarantee scheme resumed in September 2023. The FSD Tanzania review of the schemes says the SMECGS was suspended in 2008. Those two facts fit together, but the review is undated in the text read and is historic.
Who applies, the borrower or the bank?
The lender applies. The borrower applies to a registered bank or financial institution for a loan in the normal way. The lender appraises the borrower, including a Credit Reference Bureau check, and then submits a guarantee application to the Bank of Tanzania on the form for the scheme. The Bank reviews the application and issues the guarantee to the lender.
The Bank's page lists the borrower profile. The business should be registered in Tanzania and mostly Tanzanian-owned, with credible management, export orientation or value addition or job and tax creation. It should make the capital contribution the lender requires and offer enforceable collateral, which can include personal or third-party guarantees. The page does not say which criteria apply to which scheme, so ask the lender which form it will use.
What is covered and what is not?
| Point | ECGS | SMECGS |
|---|---|---|
| Cover of principal | Up to 75% if repayable within one year or a 12 to 15 month crop; up to 50% if over one year | Up to 50% |
| Loan size stated | None stated on the Bank's page | TZS 50 million to TZS 1 billion |
| Tenor stated | Split by one year in the cover rule | One to five years |
| Interest | Not covered | Not covered |
| Who applies | The lender | The lender |
| Maximum guarantee per borrower | Not found | Not found |
A guarantee is not a grant and not a loan to the borrower. The borrower still owes the full debt. If the bank pays out on a default and recovers from the guarantee, the borrower's debt to the bank is still enforced under the loan agreement and the security.
What does the guarantee cost?
The Bank of Tanzania page read for this guide states no fee. The 1% figure comes from The Respondent Online, which says it is a fee on the amount covered, paid by participating banks. An FSD Tanzania review also describes a 1% annual risk-sharing fee, for the ECGS only. Whether a bank passes the cost to the borrower in its interest rate or in a fee is the bank's pricing decision, and this guide has no source for it. Treat the cost to the borrower as unknown and ask for it in writing.
For scale, the Bank's Monetary Policy Statement 2026/27 reports an overall lending rate of 15.33% and a negotiated rate of 12.56% in April 2026, and private-sector credit growth averaging 20.2% from July 2025 to April 2026. Those are market averages, not product rates.
Are the headline numbers reliable?
Not yet as a pair. The 5 November report gives TZS 2.1 trillion in loans and TZS 1.6 trillion in guarantees. The June 2026 framework report says that by December 2025 the resumed scheme had supported loans of TZS 185.72 billion and guarantees of TZS 116.68 billion, with agricultural marketing cooperatives the main beneficiaries. The first set is probably cumulative since 2002. The second covers the period after the 2023 resumption. This guide could not reconcile them and does not use either as a measure of how easy it is to get cover.
The ratio is also worth reading. Guarantees of TZS 1.6 trillion against loans of TZS 2.1 trillion means the Bank covered about three quarters of principal on average, which is consistent with the ECGS cover rates for short loans. That is arithmetic on a press report, not a statistic the Bank published.
What is the proposed Credit Guarantee Corporation?
Several 2026 sources describe a separate Credit Guarantee Corporation. The Bank published a draft of the Banking and Financial Institutions (Credit Guarantee Corporation) Regulations, 2026, made under section 71 of the Banking and Financial Institutions Act. The Government Notice number and date in the draft are blank. As read through a summary tool, the draft would cap cover at 80% unless the Bank authorises more, require minimum capital of TZS 50 billion and cap liabilities at five times shareholders' funds. Treat those figures as draft and verify them.
The Guardian reported on 18 June 2026 that the 2026/27 budget proposes to formalise the scheme under Bank supervision and create an independent corporation. On 4 November 2026 the Minister for Minerals said the corporation had been established and registered. No Bank of Tanzania or Treasury source confirms a licence. Whether the existing SMECGS and ECGS book moves to the corporation was not found.
How does the new movable collateral law fit?
FB Attorneys reported on 8 October 2026 that a law named the Secured Transactions (Movable Property) Act, 2026 was gazetted on 2 October 2026 and awaits a commencement notice. It describes a collateral registry at the Bank of Tanzania, priority by registration and enforcement after a registered notice. Press during the bill stage used other names. No Parliament or Gazette source was found, so treat the name and the status as unconfirmed.
If it commences as described, trucks, machines, stock and receivables could secure a loan without a mortgage over land. That would help owners whose main assets are movable. It does not change the need for a lender to appraise the project, and it does not make a guarantee automatic.
What do banks check even with a guarantee?
The Land Act, Cap. 113 governs mortgages of land. A lender takes a mortgage, registers it, and checks consent and the borrower's right to mortgage. A law firm note on a Court of Appeal decision says a spouse's consent matters under the Law of Marriage Act and that the 2005 mortgage regulations allow an affidavit of non-marriage. That is a secondary source, so ask the lender's advocate how it applies.
For a company borrower, a charge is registered at BRELA under the Companies Act, Cap. 212 R.E. 2023. The register lists a fee that rises with the sum secured, from TZS 22,000 up to 100 million to TZS 150,000 above 1 billion (register ID F0011). The Chief Valuer approves a valuation report for a fee of 0.02% of market value above TZS 100 million where the purpose is a mortgage (register ID F0471). The Finance Act 2026 also raised stamp duty on bills of sale given as security to a maximum of TZS 100,000, as reported by Clyde and Co.
A worked example: a TZS 400 million agro-processing loan
An agro-processor in Morogoro has a three-year offtake contract with a licensed buyer. It wants a TZS 400 million three-year loan for a dryer and a packing line. The bank asks for security worth TZS 500 million. The company owns a building valued at TZS 300 million and the dryer would be worth TZS 150 million once bought. The collateral gap is TZS 50 million to TZS 200 million depending on how the bank values the new equipment.
The bank may apply to the SMECGS, because the loan sits in the TZS 50 million to TZS 1 billion band and the term is within one to five years. A guarantee of up to 50% would be up to TZS 200 million of principal. A 1% fee on that covered amount is TZS 2 million if the reported fee applies and if the bank charges it through. The borrower should ask the bank for the all-in cost in writing. The figures are illustrative, and the guarantee decision belongs to the Bank of Tanzania.
The processor can strengthen the file before the bank sees it. A signed offtake agreement, the buyer's licence, three years of accounts, tax clearance and a valuation by a registered valuer all help the bank's appraisal. A guarantee does not replace them.
Where do idle assets and offtake fit in?
On Fursa365 an asset owner can list a warehouse, a truck or a herd and receive verified demand. A signed hire or offtake agreement is evidence of income that a lender can read. It is not security by itself, and Fursa365 does not arrange loans or introduce lenders. The platform never holds money and takes no part in the loan.
The practical link is the order of work. Match first, sign the NDNCA, let the client's advocate draft the agreement, then take the contract to a bank. A bank that sees a verified counterparty and a written agreement has more to appraise than one that sees an idea.
What to do now
- Ask the bank which scheme it uses for your loan size and tenor, and whether it will apply to the Bank of Tanzania.
- Ask for the cost in writing, including any fee that passes from the guarantee to you.
- Count your collateral carefully: titles, charges already registered, spouse consent, and a valuation by a registered valuer.
- Prepare the business file: BRELA documents, TIN, tax clearance, accounts, contracts and the project budget.
- Do not rely on unconfirmed items: the Credit Guarantee Corporation licence and the movable property registry are not yet confirmed as operating.
- If you hold an idle asset, list it on Fursa365 with evidence, sign the NDNCA when matched, and let your advocate draft the agreement before a bank reads it.
- Keep the dates for your own loan covenants and for any registration of a charge.
Key dates
| Item | Date or status |
|---|---|
| ECGS started | July 2002, as reported |
| SMECGS started | September 2005, as reported |
| Scheme resumed | September 2023, per the June 2026 framework report |
| Draft Credit Guarantee Corporation regulations | Published on the Bank's site in 2026; final text not found |
| Movable property security law | Reported gazetted 2 October 2026; commencement awaited |
| Finance Act 2026 changes | Effective 1 July 2026 unless stated |
| Registration of a company charge | Time limit not read; confirm with BRELA or your advocate |
How Zatra helps
Zatra Consultants Limited screens the facts of an offer or request before Fursa365 shows it, and structures the file a lender will read: company documents, tax position, contracts and a bank-readiness pack. Zatra does not lend, guarantee a loan, hold money, license a bank or value an asset. The Bank of Tanzania and the lender decide their own matters, and Zatra does not decide or guarantee any authority's outcome. A client who engages Zatra to structure a deal pays a professional fee under a PSFA, separate from government and bank charges. Mainland rules are described. Zanzibar has its own laws and bodies, and a Zanzibar borrower should confirm which scheme and which regulator apply.
Related pages on Fursa365 include how Fursa365 works, the verification standard, the business deals desk and regulatory boundaries.
Sources and status
Accurate as at 6 Nov 2026. Figures are from the sources below and from the Zatra government fees register, quoted with their register IDs so they can be checked line by line.
- Bank of Tanzania, financial deepening page on credit guarantee schemes (Swahili). Bank of Tanzania, undated page, read 2026. Accessed 6 Nov 2026.
- BoT guarantees TZS 2.1 trillion in loans. The Respondent Online, 5 November 2026. Accessed 6 Nov 2026.
- National Financial Inclusion Framework 2023-2028 mid-term evaluation report. National Council for Financial Inclusion, hosted by the Bank of Tanzania, June 2026. Accessed 6 Nov 2026.
- Draft Banking and Financial Institutions (Credit Guarantee Corporation) Regulations, 2026. Bank of Tanzania, draft, 2026. Accessed 6 Nov 2026.
- Monetary Policy Statement 2026/27. Bank of Tanzania, June 2026. Accessed 6 Nov 2026.
- New law on movable assets as security for loans introduced. FB Attorneys, 8 October 2026. Accessed 6 Nov 2026.
- Tanzania's 2026/27 budget: key implications for the banking sector. The Guardian, IPP Media, 18 June 2026. Accessed 6 Nov 2026.
- Tanzania tax update: Finance Act 2026 highlights. Clyde and Co, 3 July 2026. Accessed 6 Nov 2026.
- Review of guarantee schemes. FSD Tanzania, 2016 upload, undated, historic. Accessed 6 Nov 2026.
- Zatra Tanzania Government Fees Register 2026, company and valuation chapters. Zatra Consultants Limited, 2026 edition. Accessed 6 Nov 2026.
Figures to confirm before you act
- Guarantee fee: 1% on the amount covered is reported by The Respondent Online, not stated on the Bank of Tanzania page; confirm with the lender
- Draft Credit Guarantee Corporation figures (80% cap, TZS 50 billion capital) come from a draft with a blank Government Notice; confirm the final text
- TZS 2.1 trillion and TZS 1.6 trillion are press figures that do not reconcile with the TZS 185.72 billion and TZS 116.68 billion in the June 2026 framework report
- Name and commencement of the movable property security law: one law firm note only; confirm with the Gazette
- BRELA charge registration fee by sum secured (register ID F0011) and Chief Valuer approval fee (register ID F0471)
General information prepared by the Fursa365 deal desk, Zatra Consultants Limited. It is not legal, tax or investment advice and does not decide or guarantee any authority's outcome. Confirm current rules and fees with the authority named and your own advocate before you act. Mainland Tanzania is described; Zanzibar has separate laws and bodies.
Questions readers ask
Can I apply to the Bank of Tanzania for a credit guarantee myself?
No. Under the Bank's description the lender applies, on the scheme form, after it has appraised you and checked the Credit Reference Bureau. You apply to a registered bank or financial institution for a loan and ask whether it will seek cover.
Does a guarantee mean the bank must approve my loan?
No. The Bank says the schemes are not an exemption from normal lending requirements, and the project must pass the lender's full credit appraisal. A guarantee reduces the bank's loss on a collateral gap. It does not decide the credit decision.
What does the guarantee cover?
Principal only. Under the export scheme cover is up to 75% for loans within one year and up to 50% over one year. Under the SME scheme cover is up to 50% for loans of TZS 50 million to TZS 1 billion over one to five years.
Is the 1% fee paid by the borrower?
The report says participating banks pay it. Whether the bank passes it on is the bank's pricing choice, and no source here states it. Ask for the all-in cost in writing before you sign, and keep the answer with your loan file.
Is the Credit Guarantee Corporation operating yet?
Not confirmed. A draft regulation exists and a minister said on 4 November 2026 that it is established and registered, but no Bank of Tanzania or Treasury source confirms a licence. Ask your bank which scheme it is using today.
Can I borrow against a truck or machine now?
Banks already take charges over vehicles and equipment, such as under asset finance. A new movable property registry was reported as gazetted on 2 October 2026 but not yet in force. Confirm commencement before you rely on it.
Does Fursa365 arrange loans or guarantees?
No. Fursa365 never lends, never holds money and does not introduce lenders as a service. It matches qualified idle assets, skills and capital with verified demand. A signed agreement from a match can support your own application to a bank.
Does this apply in Zanzibar?
This guide describes Mainland rules. Zanzibar has its own companies, land and tax laws that affect security, and this guide did not confirm how the schemes apply there. A Zanzibar borrower should ask the lender and an advocate which rules apply.
CPA. Tax compliance, VAT and withholding planning, financial governance and bankable business plans. Sixteen years in accounting and finance.
