Tanzania: Bankers Want Identity Cards Project Hastened

Dar Es Salaam — The Tanzania Bankers Association (TBA) has urged the government to fast-track the national project to provide Tanzanians with identity cards (IDs), saying the IDs are important documents for securing financial services such as loans.

The association says that lack of clear identification is a major setback to the banking sector, as banks shy away from giving personal loans to people because some of them turn out to be foreigners.

According to TBA chairman Lawrence Mafuru (pictured), banks now charge high interest rates for personal loans because of such shortcomings which are inherent in the economy.

He said the high charges are necessitated by the need to secure the high risk factor when lending. "Risk premium is what raises the interest rates as many people still feel that they can get to a bank, borrow money and go without being traced," he said noting that with IDs it will be easier for citizens to access loans as the document is proof of their real identity.

The ID project, first mooted in the early 1960s, has been on and off for various reasons - both political and financial. It was only revived last year, with the government listing it among its top priorities in the 2010/11 Budget.

The government has picked a Malaysian firm for the $149 million (about Sh200.2 billion) project contract.