AIRPAY (T), a digital financial payment company recovering loans issued by the Zanzibar Economic Empowerment Agency (ZEEA) is requesting central bank approval to take 33percent of any available balance on a customer’s phone to reduce debt on existing loans.

Mihayo Wilmore, an Airpay (T) executive, issued this appeal over the weekend at a ceremony to launch ollaboration between Airpay and ZEEA, also attended by officials of the Bank of Tanzania (BoT), plus stakeholders from various banks and mobile networks.

Emmanuel Tutuba, the BoT governor, commended the partnership, asserting that the digital payment system will streamline the repayment process for interest-free loans.

He expressed confidence that the system will enhance repayment efficiency, with the Airpay executive stressing the need to make loan repayment as seamless as possible for users.

"A borrower can go to any agent to make a payment easily. The challenge arises when loans are not repaid, resulting in bad debt,” he said, seeking approval for the ‘air pay’ loan recovery method.

He also expressed the desire to create more accessible repayment alternatives which comply with BoT regulations, especially for borrowers who have been uncooperative.

For over a year and a half, Airpay has been engaging citizens and local officials on the issue, thus moved to seek modifications on repayment procedures.

“Even if you travel abroad and forget to use the system, it will still function. This is why we have sought BoT’s permission to proceed with this approach," he explained.

Juma Burhan Mohamed, the ZEEA CEO, said that the agency has issued loans totalling 34.9bn/- benefiting 14,000 women and 9,000 men.

From 2022 to 2024 loan distribution went smoothly, he said, asserting that the new online system was a positive development “as everything is increasingly moving in that direction.” 

Beneficiaries should understand that the government’s financial support is not just for individual benefit but for the welfare of the wider public.

The governor was persuaded that Airpay assistance will effectively support efforts to get the public to repay interest-free loans provided by the Zanzibar government.

The collaboration isi focused on simplifying digital transactions with individuals and small businesses, to facilitate timely loan repayment and improve access to loan funds.

He said that Airpay and mobile service providers can help those accessing loans through ZEEA to repay them through the three banks operating banks, namely PBZ, CRDB Bank and TCB.

Repaying these loans will be difficult for some, but the Airpay system will make it easier for borrowers to repay their loans, no matter their location. This will reduce the time, inconvenience and transport costs traditionally required to visit bank branches, he stated.

The loaned funds are not a gift but a tool for economic empowerment, enabling people to generate profits, he said, urging recipients to repay, so that funds are available to other needy individuals.

Through ZEEA, 78 percent of the loan fund have been repaid, though some borrowers have yet to offer valid reasons for not repaying, he stated, affirming that ZEEA and the lending banks need to follow up with borrowers. 

As of December last year, the average repayment rate stood at 3.3 percent and had since declined, he said. Borrowers must be integrated into the repayment system and if they fail to repay they should be ineligible for future loans, he added.