Govt to resume disbursement of council loans next month

DODOMA: AFTER a brief hiatus, the government will recommence the disbursement of interest-free loans, funded by 10 per cent council revenues, to empower women, youth, and persons with disabilities by November 30.

The loans were suspended in April 2023 to allow for a review and improvement of the disbursement process following findings from the 2021/22 report by the Controller and Auditor General (CAG).

Deputy Minister of State in the President’s Office (Regional Administration and Local Government), Dr Festo Dugange announced the development in Parliament on Tuesday, noting that the government has already revised the relevant laws and regulations to ensure a more efficient and transparent loan disbursement system.

Responding to a basic question by Special Seat MP Santiel Kirumba, who inquired about the timeline for resuming these loans, Dr Dugange said the government have also conducted extensive training for government officials and loan recipients to familiarize them with the new system.

“The government has already revised the relevant laws and reviewed the 2019 and 2021 Regulations on the Issuance and Management of Loans for Women, Youth, and People with Disabilities,” Dr Dugange said.

He said the 2024 regulations have now been introduced, ensuring a structured approach to loan disbursement.

Training sessions for the new loan issuance system have commenced, with 862 officials at regional and council levels already trained. Further training is underway for loan management committees at the ward, council, and district levels, along with group leaders, according to Dr Dugange.

“We are confident that this will address the challenges that led to the suspension of the loans,” said Dr Dugange.

In a follow-up question, Ms Kirumba sought clarification on the government’s plans to collaborate with MPs to educate citizens on the loans, and its strategy to link the Prime Minister’s 18 empowerment funds for easier access.

Dr Dugange assured that a directive had been issued to District Executive Directors to involve MPs and Councillors from all constituencies, including Special Seats, in mobilizing citizens to join eligible groups to benefit from these loans.

He also confirmed that all ministries work in coordination, ensuring that 10 per cent loans and those managed by the Prime Minister’s Office are channeled through councils to reach the intended beneficiaries.

Further, Hai MP Saashisha Mafuwe in a supplementary question wanted to know if by expanding the eligible youth age limit to 45 warrants opening the loans to all men.
Responding, Dr Dugange clarified that the loans specifically target Women, Youth, and People with Disabilities; however, the increased age limit now includes both male and female youth.

Nkasi MP Aida Kenani inquired if the loan funds would be distributed in full or prioritized for applications submitted before the suspension.

Dr Dugange responded to that and said that applications submitted earlier would be prioritized, with a phased approach to disbursement.

In July this year, the loan disbursement began through selected banks for 10 pilot councils. These include Dar es Salaam, Dodoma, Kigoma Ujiji, Songea, and the towns of Newala and Mbulu, as well as the districts of Siha, Nkasi, Itilima, and Bumbuli.

To enhance loan disbursement and management, the remaining 174 councils will adopt a new system. This involves setting up a dedicated unit within PROLAG to oversee loans for women, youth, and people with disabilities, as well as forming loan management committees at the regional, council, and ward levels.