By Business Insider Reporter
The Tanzanian government has signalled plans to introduce a new legal framework that could transform access to financing for young entrepreneurs by allowing movable assets – including academic certificates – to be considered as collateral for loans.
The proposed reforms come as authorities intensify efforts to tackle youth unemployment and expand financial inclusion by easing access to affordable credit for graduates and small business owners who often lack traditional collateral such as land or buildings.
Speaking in Parliament in Dodoma, Deputy Minister for Finance, Laurent Luswetula (pictured above) said the government was in the final stages of preparing a Movable Assets Collateral Law aimed at formally recognising movable property in the credit system.
The proposed legislation is expected to broaden the range of assets that banks and financial institutions can accept as security for loans, potentially opening financing opportunities for thousands of graduates and young entrepreneurs who remain locked out of the formal banking sector.
The issue was raised in Parliament by Special Seats MP Neema Peter Majule, who sought clarification on when graduates would be allowed to use academic certificates as collateral to secure capital for investment projects and business start-ups.
According to Deputy Minister Luswetula, the government is also working with the Bank of Tanzania to strengthen oversight, transparency and monitoring mechanisms surrounding the use of movable assets in lending.
“Among the assets being evaluated are professional and academic certificates held by university graduates, with the aim of assessing the possibility of recognising them as collateral in accessing loans,” Mr. Luswetula told Parliament.
The move reflects growing pressure on policymakers to address financing barriers facing Tanzania’s rapidly expanding youth population, particularly university graduates struggling to transition into self-employment and entrepreneurship.
Tanzania’s banking sector has traditionally relied heavily on fixed assets – especially land and buildings – as the primary form of collateral under the country’s land laws. As a result, many young people, despite possessing professional qualifications and viable business ideas, have remained excluded from formal credit markets.
Financial analysts say the proposed reforms could help stimulate entrepreneurship, innovation and small business growth if accompanied by strong risk management systems and credible borrower assessment frameworks.
The initiative also aligns with Tanzania’s broader economic strategy of promoting youth-led enterprise development, industrialisation and inclusive growth under the country’s long-term development agenda.
Beyond the proposed legal reforms, the government is encouraging graduates to take advantage of existing low-interest financing schemes managed through youth development funds and other state-supported programmes designed to support start-ups and small enterprises.
Over the past few years, Tanzania has expanded discussions around alternative collateral systems as part of efforts to deepen financial inclusion and improve access to credit for underserved groups, including women, youth and informal businesses.
Across Africa, several countries have adopted movable collateral registries that allow borrowers to secure loans using assets such as machinery, inventory, livestock, vehicles and receivables. Supporters of such systems argue they can significantly improve credit access for small businesses that lack formal property ownership. Economists say Tanzania’s proposed framework could mark a significant shift in the country’s lending environment if implemented effectively, particularly at a time when youth unemployment and access to capital remain among the most pressing economic challenges.
