A Critical Analysis of the Legal and Ethical Challenges of Digital Lending Applications in Tanzania: A Doctrinal Analysis with Comparative Reference to Nigeria

App-based digital lending has changed how Tanzanians borrow: a loan can be applied for, scored and disbursed on a handset within minutes, with an algorithm in place of the loan officer and the borrower’s phone data in place of collateral. This article asks whether Tanzanian law has kept pace with that change. Using doctrinal legal research, it examines the Microfinance Act, Cap 407, its 2019 Non-Deposit Taking Regulations, the Bank of Tanzania’s 2024 Guidance Note on Digital Lenders, the Financial Consumer Protection Regulations as amended in 2025, the 2025 Complaints Guidelines and the Personal Data Protection Act, Cap 44. The analysis draws on information asymmetry theory, the vulnerability theory of the consumer, informational self-determination and contextual integrity, and algorithmic accountability. It finds that the reforms of 2019 to 2025 have filled most literal silences in the law, but that the framework retains one legal gap, the absence of any standard for authenticating a guarantor’s consent on a mobile interface; four normative gaps, concerning informed guarantor consent, a flat penalty ceiling, the timing and comparability of cost disclosure, and weak explanation and reconsideration rights for automated decisions; two implementation gaps, in unaudited debt recovery and in-app redress; and one coordination gap among the Bank of Tanzania, the Personal Data Protection Commission and the newly designated self-regulatory associations. Nigeria’s move from interim guidelines to binding regulations, upheld by its Federal High Court in 2026, shows that converting guidance into enforceable rules is achievable. The article recommends a binding guarantor-verification standard, scaled penalties, pre-application cost disclosure, specified algorithmic disclosure, joint sampled audits and a formal inter-agency memorandum of understanding.