The Citizen (Dar es Salaam)
Samuel Kamndaya
17 July 2008
Dodoma — Former First Lady Anna Mkapa and the vice-chancellor of a public university were named in Parliament on Tuesday night as the owners of a microfinance company accused of ripping off thousands of schoolteachers.
The MP for Mbozi East, Mr Godfrey Zambi, claimed that Mrs Mkapa and Mzumbe University Vice-Chancellor Ibrahim Kaduma are the directors of Bayport Financial Services, which has been giving loans to teachers and other civil servants.
The CCM lawmaker accused the company of lending money to the teachers "at exorbitant interest rates that surpass those of the commercial banks".
Mr Zambi told the National Assembly that the company's officials took advantage of their close links with top government officials to get the teachers' and civil servants to sign contracts for deductions from their salaries through the official payrolls.
Efforts yesterday to reach Mrs Mkapa and Prof Kaduna for comment on the allegations failed.
On Tuesday, Mr Zambi said: "The teachers came to me complaining that Bayport Loans make them even poorer, with interest on its loans shooting up to 67 per cent in one year. It pains me to note that such companies are owned by our own leaders."
He alleged that the company charges cumulative interest rates that go up to 200 per cent. "If a teacher gets a Sh1million loan, he will end up paying Sh3 million in three years. Such rates are quite exorbitant and are in no way helping teachers," he said, demanding that the ministry of education issue a statement on the issue.
Mr Zambi was contributing to the budget estimates for the Ministry of Education and Vocational Training, which were presented on Monday by the minister, Prof Jumanne Maghembe.
Speaking separately to The Citizen on Tuesday evening after the parliamentary session, the MP alleged that the company had been issued with an introductory letter from the State House in the last days of the Mkapa administration to offer financial services to teachers and other civil servants.
However, in a disclaimer, State House is said to have warned that it would not be held liable for any transactions between the company and any of its clients.
Mr Zambi gave neither the date nor the name of the State House official who allegedly signed the letter.
According to him, the lending rates by financial institutions should not exceed 30 per cent.
"Teachers have been shocked to see huge deductions from their salaries going to service the loans. I have nothing against the company. It is only disheartening to note that our own leaders are profiting from the poorly-paid teachers," he said.
The teachers, he alleged, were unable to terminate the contractors, while defaulters risked having their properties auctioned.
Education minister Maghembe promised to investigate the matter to establish whether the MP's claims were true of false.
However, he cautioned teachers against being duped into signing up for costly loans.
Since Mr Mkapa's retirement in 2005, after serving two five-year terms, the former First Family has been in news over allegations of involvement in business ventures, some of which have generated public controversy amid claims of abuse of office during his tenure.
Some of his critics have gone as far as calling for investigations and his possible arraignment over corruption allegations. But addressing a public function in his home district of Masasi in southern Tanzania recently, Mr Mkapa defended himself, accusing his critics of having a "hidden agenda" against him.
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