THE government has unveiled a digital system to combat fraud and fake groups in the 10 percent council loans for women, youth, and people with disabilities.

The announcement was made by the Deputy Minister of State in the President’s Office for Regional Administration and Local Government (PO-RALG), Zainab Katimba, during a parliamentary session in response to a question from Special Seats MP (Chadema), Esther Matiko.

Matiko had asked what measures the government was taking against fraudulent activities and ghost groups involved in the 10 percent loans for women, youth, and people with disabilities.

In her response, Katimba explained that the new system ensures that all groups are electronically verified before receiving loans. 

She also emphasised that the government acts promptly when fraud or ghost groups are identified during the loan distribution process.

“Alongside providing education for beneficiaries, several actions are taken against fraud, including suspending loans to the affected groups, initiating investigations, and taking disciplinary actions against public servants involved or failing to fulfill their duties in accordance with laws and regulations,” she said.

Katimba further stated that the digital system was introduced to improve the loan distribution process and reduce fraudulent activities.

In a supplementary question, Special Seats MP, Latifa Juakali (CCM), asked about the government’s plans to educate youth on the 10 percent loan programme.

In her response, Katimba explained that local government authorities have been providing loans to women, youth, and people with disabilities, based on 10 percent of the councils' own revenues, in line with Section 37A of the Local Government Finance Act, Cap 290, and the 2024 Regulations on Loan Provision and Management.

She added that according to Regulation 38 of the 2024 loan provision and management regulations, local government authorities are required to provide training for loan applicants. This training includes savings, group formation, leadership, financial management, project implementation, and loan repayment monitoring.

In the 2024/25 fiscal year, local government authorities have provided training to 2,827 youth groups that received 10 percent loans from the council revenues.