Tanzania Tables Bill to Let Banks Accept Movable Assets as Loan Collateral, Targets 50% Credit-to-GDP by 2030

Tanzania’s Minister for Finance, Ambassador Khamis Mussa Omar, tabled a Bill in the National Assembly in Dodoma on 31 August 2026 that would let banks accept movable assets as loan collateral.

Presenting the legislation to Parliament, Omar said the proposed law aims to increase the proportion of the population using banking services from 22% in 2023 to 50% by 2030, the ratio of private-sector credit to gross domestic product (GDP) from 22.5% in 2024 to 50% by 2030, and the financial sector’s contribution to economic activity to 20% by 2030, up from 17.1% in 2024, while supporting employment creation.

Expanding eligible collateral to include movable property, rather than relying predominantly on land and buildings, is central to widening credit access for individuals and businesses, Omar explained.

The Bill also addresses the absence of a centralised registry for movable collateral, which has allowed the same asset to secure multiple loans without other lenders’ knowledge and contributed to rising non-performing loans, as well as the lack of a coordinated management framework and clear procedures for enforcing borrower and lender rights when pledged assets are sold.

Certain movable assets can also lose value quickly or deteriorate over time, reinforcing the need for a dedicated legal and administrative framework.

The Bill is divided into ten parts establishing a comprehensive legal framework for the use, registration, management and enforcement of security interests arising from movable assets.

Part One sets out preliminary provisions, including the name of the Act, its commencement, scope of application and definitions of key terms.

Part Two establishes provisions within the Bank of Tanzania (BoT) relating to security interests, defining the central bank’s authority and its power to delegate functions.

Part Three defines interests in security for one or more loans and specifies the tangible, intangible, movable and immovable assets that may qualify as collateral, while requiring the BoT to consult the Minister before designating eligible asset classes.

Part Four governs the registration of security interests, the validity period of registrations, procedures for amending or cancelling them, and the search of registered information.

Part Five addresses the enforceability of security interests against third parties, interests in proceeds generated by pledged assets, and enforcement of interests in movable assets that have been commingled.

Part Six sets out priority rules among competing creditors, the treatment of commingled proceeds and payments, and the effects of a borrower’s insolvency on security interests.

Part Seven establishes the right to inspect pledged assets, disclosure obligations, the duty to safeguard collateral, and the rights and obligations of debtors, including claims over expected collections and payment instruments.

Part Eight governs enforcement of security interests, covering registration of enforcement notices, disposal procedures, use of collateral to satisfy loan obligations, distribution of sale proceeds, a lender’s proposal to take ownership of collateral in settlement of debt, the borrower’s right to object to that proposal, and rules on storage costs and alternative storage locations.

Part Nine contains general provisions on enforcing rights and obligations, compensation claims for breaches, immunity, penalties for providing false information, and a complaints and appeals process against BoT decisions, while empowering the Minister to issue implementing regulations.

Part Ten proposes consequential amendments to several existing laws, including the Bank of Tanzania Act, the Companies Act and the Bankruptcy Act, to align them with the new framework.

Omar said enactment of the law would help create a better environment for accessing credit, strengthen collateral management, protect the rights of borrowers and lenders, and support the development of Tanzania’s financial sector.

He had earlier outlined the collateral reform among eight financial sector priorities he announced in April 2026, which also cover Islamic banking, climate finance and access to capital for small and medium enterprises.

Tanzania’s Secured Transactions Reform Under the IMF Programme

The Movable Property Security Rights Bill fulfils a structural benchmark under Tanzania’s Extended Credit Facility (ECF) arrangement with the International Monetary Fund (IMF), approved in July 2022.

Under the programme, the authorities committed to drafting a Secured Transactions Act that would broaden the pool of assets eligible as loan collateral to include movable property, originally due for submission to Parliament by end-September 2024.

The IMF subsequently reset the submission deadline twice, first to end-March 2025 and later to end-February 2026, before the government tabled the Bill in the National Assembly six months after that revised target.

The reform also supports Tanzania’s National Financial Inclusion Framework 2023-2028, which aims to give all adults and businesses access to affordable and high-quality financial products and services.