Judul : BoT and NMB Face Defence Rights Threat in Yetu Microfinance Case
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BoT and NMB Face Defence Rights Threat in Yetu Microfinance Case
Dar es Salaam. The Bank of Tanzania (BoT) and NMB Bank face the possibility of losing their ability to defend themselves in a legal action initiated by shareholders of Yetu Microfinance Bank (YMB), following their failure to submit written statements of defence (WSD) within the legally mandated period.
The legal matter, case number 24650 from 2025, was initiated by the Youth Self Employment Foundation (Yosefo), a key investor in YMB, via its officially appointed trustees, Cornelius Kasiya Kariwa and Altemius Ambros Milinga.
They are disputing the central bank's choice to assume control of the microfinance institution and transfer it to NMB.
The inability of the two banks to file their written statements of defence (WSD) within the legally mandated period puts them at risk of losing the opportunity to address the accusations.
The respondents include the Bank of Tanzania (first respondent), NMB (second respondent), and the Attorney General (AG), who has been added as a required party since the case pertains to a government entity.
The plaintiffs are contesting BoT's choice to take control of the bank, arguing that it was due to insufficient capital, and transfer it to NMB. They reject the claim that the bank had a lack of capital, maintaining that BoT's reasoning was baseless.
The owners claim the central bank violated legal procedures and fairness by seizing their bank without their approval or payment.
They are requesting the court to mandate the return of the bank, payment exceeding Sh6 billion, compensation, and additional solutions.
The matter is being considered by Judge-in-Charge of the High Court's Dar es Salaam Sub-Registry, Justice Salma Maghimbi.
On Wednesday, November 12, 2025, when the issue was brought up, the court was scheduled to examine if the defendants had adhered to its directive to submit their written responses.
The plaintiff's attorney, Mr. Ibrahim Bendera, informed the court that all defendants received the legal papers — BoT and NMB on September 30, and the AG on October 2, 2025 — providing them sufficient time to reply.
He mentioned, nevertheless, that only the AG had submitted a defence within the deadline. The BoT filed its statement late, whereas the NMB had not provided any response whatsoever.
Mr. Bendera requested the court to handle the case in his absence (a one-sided hearing) against the first and second defendants.
State Attorney Catherine Kiiza, speaking on behalf of both the AG and BoT, acknowledged that BoT submitted its defense late but asked for more time, stating that the bank is a government entity.
The legal representative of NMB, Mr. Mrano Mlekano, also requested an additional day, stating that the recent election-related disturbances had prevented him from finishing the submission.
He added that certain important documents were unavailable without permission from the chief financial officer of NMB and the compliance department of BoT.
Nevertheless, Mr. Bendera rejected both requests, stating they were without foundation and advising the court to continue with the case against the two defendants who had not fulfilled legal obligations.
Following the receipt of arguments from both parties, Judge Maghimbi postponed the case until November 18, 2025, for a decision and additional instructions.
In accordance with civil procedure rules, a defendant who does not file a written response within the specified period forfeits the opportunity to present their case unless there are valid justifications for the delay.
Should the court determine that BoT and NMB's justifications are inadequate, BoT's delayed submission might be dismissed, and NMB's application for more time could be rejected — in effect, causing the case to move forward without their defense.
As per legal documents, Yetu Microfinance Bank had 12,350 shareholders and provided services to over 200,000 customers in eight areas across mainland Tanzania and Zanzibar.
The financial institution made its debut on the Dar es Salaam Stock Exchange (DSE) on March 10, 2016, with a fully paid-up share capital of Sh6.056 billion.
As of June 30, 2022, the audited financial reports of YMB indicated a stable financial condition, complying with all legal liquidity and capital sufficiency standards.
Nevertheless, on September 28, 2022, BoT stated that YMB did not have enough capital, referencing a Special Audit Report — which the shareholders argue was carried out illegally and without their involvement.
In December 2022, BoT released an initial takeover announcement, indicating that YMB's capital status was negative Sh7.7 billion, even though the same document noted that by June 30, 2022, the bank had a core capital of Sh6.79 billion.
After that, YMB was put under statutory administration and later transferred to NMB.
The claimants argue that YMB never experienced any capital shortfall and that BoT never mandated a recapitalization. They assert that the bank kept fulfilling its financial responsibilities, including providing loans to its customers, up until the acquisition.
They claim the procedure was carried out behind closed doors and lacked ethical standards, leading to both hidden and visible abuses that harmed the interests of shareholders.
They also assert that the bank was sold without competitive bidding, preventing shareholders from receiving fair value for their investment and denying them a chance to be involved in the process.
The shareholders are requesting the court to rule that BoT's acquisition and the following transfer of YMB to NMB are illegal.
They are requesting Sh6.18 billion as compensation for the worth of their investment, Sh2 billion in general damages, Sh3 billion in punitive damages, along with interest and legal expenses.
Provided by SyndiGate Media Inc.Syndigate.info).Thus the article BoT and NMB Face Defence Rights Threat in Yetu Microfinance Case
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