On September 25, 2024, the Bank of Tanzania (BoT) issued the "Guidelines for Digital Lenders under Tier II Microfinance Service Providers", which set out clear, mandatory requirements for A2P SMS transmissions: all digital lending platforms must clearly display the institutional name listed on their central bank-issued license when sending A2P messages such as OTPs (One-Time Passwords) and transaction notifications, and are prohibited from using vague or unrelated sender IDs. This requirement aims to enhance the transparency and credibility of SMS origins, help users identify legitimate financial institutions, and effectively guard against fraud and phishing attacks.
In addition to the mandatory requirement for SMS sender names, the guidelines also impose constraints on lenders’ SMS communication practices from the perspectives of data protection and consumer rights. Lenders must comply with relevant Tanzanian data protection laws, properly safeguard customer information, and are strictly prohibited from accessing customers’ contact lists or social media accounts for debt collection or other purposes. This means lenders may not harass borrowers’ relatives or friends via A2P SMS or phone calls, and all debt collection activities must be legal and compliant.
At the business operation level, institutions that have obtained a Letter of No Objection from the central bank may not operate more than one digital platform. Each platform must have a robust and secure system architecture, and is required to submit materials including user interface screenshots, lending policies, and pricing models for central bank review. Furthermore, lending platforms must post key information such as loan interest rates, fees, penalty interest, credit limits, and terms in their applications in plain and easy-to-understand Swahili or English. They must also deploy customer service staff with ICT capabilities to ensure users can access human-assisted services via the publicly available contact methods (phone, email).
The central bank stated that this move is intended to respond to the rapid growth of Tanzania’s digital lending industry and establish a new regulatory framework for non-deposit-taking tier II microfinance institutions. To date, the BoT has identified and banned 69 unlicensed illegal digital lending platforms, and will continue to strengthen law enforcement efforts in the future. The guidelines take effect on the date of issuance, and all existing digital lenders must complete compliance adjustments within the specified period. For A2P SMS service providers and enterprises, when cooperating with Tanzanian lending institutions, they must ensure that the SMS sender ID matches the name on the BoT license; otherwise, they may face risks of interception or penalties.
