Financing a Tanzanian business: BRELA, TIN, collateral and public funds
To borrow in Tanzania, an entrepreneur must first formalise the business with BRELA and the Tanzania Revenue Authority, then present accounts and collateral to a bank, a microfinance institution or a public scheme such as SIDO.
Formalise the business before applying
Registering a company or business name is done online with BRELA, the Business Registrations and Licensing Agency. You then need a Tax Identification Number (TIN) from the Tanzania Revenue Authority and a business licence issued by the council or by BRELA.
What Tanzanian banks look at
CRDB, NMB, NBC, Exim, Equity and Azania review bank statements, TRA returns and customer invoices. A business whose takings are only in cash at Kariakoo is hard to assess, which is why it pays to collect payments through an account or mobile money.
Accepted collateral and the security registry
An occupancy title remains the preferred collateral. Since the Movable Property Registration Act of 2019, equipment, stock and receivables can be recorded in the movable collateral registry kept by BRELA, widening options for SMEs without titled land.
SIDO and support for small industries
The Small Industries Development Organization supports small processing, carpentry and metalworking units across the regions. It runs a loan fund for micro and small industries and offers training, workspace and technical advice to entrepreneurs who are starting out.
Council loans and empowerment funds
Young people and women organised in registered groups can obtain the interest-free loans funded by 10% of local council revenue. The National Economic Empowerment Council also coordinates several public funds supporting Tanzanian entrepreneurs.
Microcredit as a first step
A micro-business with no banking history often starts with a group loan from BRAC or Letshego, or within a SACCOS. These options are presented on the page about microcredit in Tanzania, before moving on to an individual bank loan.
Leasing trucks and machines instead of pledging land
For a truck, tractor or machine, leasing avoids tying up a land title, because the equipment remains the lessor's property. The terms of this arrangement are covered on the page about vehicle leasing in Tanzania.
Growth sectors and sector loans
Tourism in Arusha and Zanzibar, agro-processing, logistics around the port of Dar es Salaam and the Standard Gauge Railway, and services to the Geita mines attract finance. Farming projects are usually covered under farmer loans in Tanzania.
Working capital and overdrafts
Tanzanian banks offer overdrafts and working capital lines to SMEs with an active account and regular invoices. Some banks also finance government purchase orders, which the State settles through the GePG payment system.
Islamic finance for SMEs
Amana Bank and the Islamic windows of several banks finance traders through murabaha, with the institution buying the goods and reselling them at an agreed margin. This formula is widespread among wholesalers in Dar es Salaam and Zanzibar.
Business plan and projections in TZS
A realistic business plan in shillings, with sales forecasts, costs and a repayment timetable, is required for any start-up loan. SIDO and some regional chambers of commerce help prepare it, especially for first-time borrowers.
Tax compliance before disbursement
Banks often check that the business is up to date with the TRA through a tax clearance certificate. Tax arrears or an expired licence are enough to suspend an application that is otherwise commercially sound.
Route to a business loan in Tanzania
- Register the business with BRELA, obtain a TRA TIN and the matching business licence.
- Open a business account and run your takings through it for at least six months.
- Prepare a business plan in TZS with financial statements or a regularly kept cash book.
- Identify available collateral: occupancy title, equipment recorded in the BRELA registry, personal guarantee.
- Submit the file to a bank, SIDO or a microfinance institution, then host the site visits.
- Sign the contract, register the security and provide the periodic reports the lender asks for.
Costs of business finance in Tanzania
| Item | Amount | Driver |
|---|---|---|
| Interest rate | Negotiated with the bank, no legal cap | Sector risk, collateral, years trading |
| Arrangement fee | Percentage of the loan | Bank, amount, complexity |
| Security registration | BRELA or land registry fees | Type and number of assets pledged |
| Collateral valuation | Licensed valuer's fees | Value and location of the assets |
| 10% council loans | Interest-free | Eligible registered groups only |
Papers for an SME loan file in Tanzania
- BRELA registration or incorporation certificate
- TRA TIN and tax clearance certificate
- Valid business licence
- Bank and mobile money statements for six to twelve months
- Financial statements or management accounts
- Costed business plan in TZS
- Directors' NIDA cards and collateral documents
Why business loans get refused in Tanzania
- Presenting a business whose sales are all collected in cash, with no bank or mobile money statement to prove turnover.
- Letting the business licence expire or building up arrears with the TRA, which blocks disbursement.
- Offering as collateral land with no registered title, or owned by a relative who has not signed a consent.
- Paying a consultant who promises guaranteed access to a public fund, when these funds charge nothing to apply.
Lenders to contact
- Letshego Bank Tanzania (Faidika): Tanzanian subsidiary of the Letshego group, operating under the Faidika microfinance brand and focused on financial inclusion and personal lending.
- CRDB Bank: Tanzanian commercial bank offering business loans, including the SME Bidii loan designed for small and medium-sized enterprises.
Starting a business on credit in Tanzania: answers
Can I borrow for my Tanzanian business without a land title?
It is harder but possible. Equipment, stock and receivables can be recorded in the BRELA movable collateral registry, and leasing or group loans also avoid the need to pledge titled land.
Can foreigners get a business loan in Tanzania?
A company registered in Tanzania, even if foreign-owned, can borrow from local banks if it presents accounts, licences and collateral. Larger projects often go through the Tanzania Investment Centre to obtain the necessary approvals.
What role does SIDO play for small Tanzanian industries?
The Small Industries Development Organization supports small industries with training, premises and a loan fund. It operates in the regions and mainly targets processing and productive crafts rather than retail trade.
How long does an SME loan application take?
It depends on the bank and the collateral: a few weeks for an overdraft on an active account, longer when an occupancy title must be valued and registered or the Commissioner for Lands' consent obtained.