The state-owned SELF Microfinance Fund has disbursed Sh138 billion in loans over the past three years, reaching more than 130,000 Tanzanians and supporting over 262,000 jobs.
The fund says it combines direct lending with partnerships and local microfinance institutions to reach small traders and entrepreneurs who often struggle to access conventional bank financing.
Its loan repayment rate stood at 95.5 percent at the end of September 2026, exceeding its target of 95 percent. However, its portfolio at risk was eight percent, reflecting challenges associated with lending to businesses whose earnings can fluctuate. Speaking yesterday at a meeting with editors and journalists from various media houses, Chief executive officer Santiel Manongi said the fund was working with local microfinance institutions to reach borrowers in areas where it had no branches. The approach allows SELF to work with lenders familiar with local businesses and economic activities instead of establishing offices in every location.
‘Instead of travelling to Mbinga, for example, we can identify a financial institution operating there that knows the people and their economic activities,’ he said.
Bajajis create opportunities for young entrepreneurs
SELF is also using asset financing to help young people establish income-generating businesses, particularly those without substantial collateral or established credit histories.
Ms Manongi said the fund finances three-wheeled vehicles, commonly known as bajajis, which borrowers can use to generate income while the vehicles serve as security for their loans.
Management cited a borrower in Iringa who financed six bajajis and closely monitored the operators to ensure repayments were made.
The programme forms part of a broader lending strategy supporting employment in agriculture, trade and other economic activities. Management clarified that the reported 262,000 jobs span several sectors and are not attributable to bajaji financing alone.
Agricultural loans face repayment challenges
Despite the reported repayment performance, management acknowledged that some borrowers struggle to meet their obligations when businesses underperform or agricultural harvests fall short of expectations.
Mbeya was cited as one of the areas facing challenges with agricultural loan repayments, partly because farmers’ ability to repay depends on their harvests.
To address the risks, SELF said it was strengthening credit assessments and providing financial education to borrowers before loans were issued.
Management also urged borrowers to maintain good credit histories, warning that unpaid digital loans could affect their records with credit reference bureaus and limit access to future financing.
Where borrowers encounter difficulties, the fund may extend repayment periods or restructure loans before resorting to selling collateral, management said.
Portfolio at risk measures loans that have fallen overdue for a specified period and require closer monitoring. The eight percent recorded at the end of September does not necessarily mean that all the loans involved have been lost.
Fund reports Sh3.19 billion profit
SELF reported cumulative net profits of Sh3.19 billion over the three-year period from 2023 to 2026 and paid Sh490 million in dividends to the Treasury Registrar.
The institution has also been allocated part of the government’s Sh200 billion special microcredit initiative, with disbursements expected to begin in the next financial year.
The fund faces the challenge of extending credit to more underserved entrepreneurs while maintaining repayment discipline and ensuring public funds continue to support viable businesses and sustainable employment.