Bank of Tanzania Takes Action Against Online Lending Scams Amid Fraud Cases

The Bank of Tanzania is distancing itself from the Leo Beneath London fraud case, which led to 17 arrests. The scheme duped customers with promises of returns for watching films. In response, BoT is proposing new regulations for microfinance to combat digital lending fraud and ensure better oversight. Governor Emmanuel Tutuba stated that LBL was never licensed by the bank.

The Bank of Tanzania (BoT) recently distanced itself from a scandal involving online fraud, particularly concerning a Ponzi scheme disguised as a movie promotion venture, operated by the company Leo Beneath London (LBL). During a police crackdown, authorities arrested 17 individuals in various cities for allegedly soliciting deposits from customers in exchange for watching short films, promising significant returns based on viewership and referrals. This fraudulent scheme has reportedly attracted hundreds of victims, prompting an urgent response from regulators to enhance monitoring of digital lending activities.

In light of this incident, the central bank has faced increasing pressure to combat fraud in the microfinance sector. In a rare public statement, BoT refuted claims that LBL operated with its endorsement and asserted that it had not licensed the company. “The Bank of Tanzania would like to inform the public that it has not engaged in any discussions or issued any directives to license or allow operations of a company named Leo Beneath London (LBL), contrary to various reports circulating online,” stated Governor Emmanuel Tutuba.

Simultaneously, the BoT is advancing plans to implement new regulations in microfinance, focusing on digital and non-deposit lending practices. Proposed changes, which aim to replace 2019 regulations, will establish stricter licensing requirements, operational guidelines, and penalties for breaches. Importantly, digital lenders must ensure that all data servers are based in Tanzania, and the use of Kiswahili as the primary language is mandatory.

The recent developments surrounding the fraudulent operations of Leo Beneath London have prompted the Bank of Tanzania to take a stronger stance in regulating the microfinance sector, particularly regarding online lending practices. With new regulations being proposed to ensure transparency and protect consumers, the bank is committed to addressing the challenges posed by scams like this one. Enhanced oversight and stricter compliance requirements are essential steps toward safeguarding the integrity of Tanzania’s financial landscape.

Original Source: www.zawya.com