Payleo lending and credit policy
August 23, 2026
Payleo Financial Services Limited is a licensed microfinance institution operating under the Microfinance Act, 2018 and the Microfinance (Non-Deposit Taking Microfinance Service Providers) Regulations, 2019. We are regulated by the Bank of Tanzania (BOT), and our lending operations are conducted through a digital lending platform that has received the required no-objection clearance from the Bank.
This document provides a summary of our lending and credit policy for the benefit of our partner organisations, their designated representatives, and the beneficiaries of our credit services. The complete lending policy is filed with the Bank of Tanzania as required by the Guidance Note on Digital Lenders Under Tier 2 Microfinance Service Providers, 2024. For the full and unabridged policy document, please refer to the Bank of Tanzania.
Types of credit
Payleo offers two categories of credit service through its digital platform:
- Salary advances — credit extended directly to the registered employees of a partner company.
- Credit disbursements — facility credit operations managed on behalf of the company itself, directed toward its designated beneficiaries.
Both services operate within a company-level credit balance that is established during onboarding. Details on how this balance is determined are described further below.
1. Salary advances
Salary advances are available exclusively to employees who are registered on the Payleo platform by their employer (or the employer’s designated representative). Payleo does not require borrowers to disclose the purpose of their loan. The sole qualifying condition is that the individual is employed by a registered partner organisation.
1.1 Loan types
One-time loan (salary advance)
A short-term advance of up to 100% of net salary, repayable by the end of the current pay cycle (one month). Funds are disbursed digitally upon approval and repaid through a single salary deduction at the end of the term.
Top-up loan
A medium-term facility of up to 200% of net salary, repayable over multiple months (up to 12 months). Monthly repayment deductions may not exceed 33% of the employee’s net salary per term, ensuring that sufficient income remains for living expenses.
1.2 Eligibility and credit assessment
The amount any individual may borrow is determined by the following criteria:
| Factor | Description |
|---|---|
| Net salary | The net monthly salary as registered on the platform by the employer or their representative. |
| Outstanding credit | The total amount currently borrowed and not yet repaid. |
| Loan tenure | The duration for which the loan is requested; longer terms affect total interest cost. |
| Individual credit behaviour | The borrower’s personal repayment history, including how frequently and how long they have delayed payments, and the number of prior defaults. |
| Company credit behaviour | The overall credit performance of the employer’s workforce, including the proportion of employees whose loans are overdue or in default. |
Payleo conducts an automated credit assessment for every application, incorporating credit history from internal records and credit reference bureaus, risk scoring, and an affordability analysis. The employer (or their representative) may also review and approve each request before Payleo makes a final lending decision.
1.3 Interest and fees
All applicable interest rates, administration fees, and charges for salary advances are published on our pricing page. Interest is never collected upfront — it is paid alongside the principal at the end of each term, in accordance with regulatory requirements.
1.4 Amortization schedule
Payleo uses the reducing balance method to compute interest. Interest is calculated on the outstanding principal after each repayment, meaning borrowers pay interest only on what they still owe.
The following example illustrates a loan of TZS 2,000,000 repaid over four months with a principal commitment of TZS 500,000 per term and a combined interest and administration rate of 5% per term:
| Term | Outstanding principal (TZS) | Interest + fees at 5% (TZS) | Principal repayment (TZS) | Total payment (TZS) |
|---|---|---|---|---|
| 1 | 2,000,000 | 100,000 | 500,000 | 600,000 |
| 2 | 1,500,000 | 75,000 | 500,000 | 575,000 |
| 3 | 1,000,000 | 50,000 | 500,000 | 550,000 |
| 4 | 500,000 | 25,000 | 500,000 | 525,000 |
| Total | 250,000 | 2,000,000 | 2,250,000 |
Because interest is recalculated on the declining balance each term, borrowers who repay faster will pay less total interest over the life of the loan.
1.5 Late payment penalties
If a repayment is not received by the due date, a penalty is applied to the overdue principal. Penalties accrue daily from the first day after the due date. The following table illustrates the impact on an overdue balance of TZS 500,000 at the prevailing penalty rate of 4.5% per month (approximately 0.15% per day):
| Days overdue | Penalty accrued (TZS) | Daily accrual (TZS) | Loan classification |
|---|---|---|---|
| 1–7 | up to 3,750 | 750 / day | Watch list — reminders sent |
| 8–30 | 6,000 – 22,500 | 750 / day | Substandard — engagement strategies initiated |
| 31–60 | 23,250 – 45,000 | 750 / day | Doubtful — recovery efforts intensified |
| Over 60 | 45,000 + | 750 / day | Loss — non-performing; write-off and legal action may be considered |
Penalty charges are separate from and in addition to any administration or interest fees. The exact penalty rate applicable to your account is disclosed in the loan agreement and on our pricing page.
1.6 Repayment
Repayments are made through one of two methods:
- Salary deduction — the employer deducts the repayment amount from the employee’s salary and remits it to Payleo.
- Direct payment — the borrower pays Payleo directly before the scheduled deduction date. Early payment reduces total interest cost.
If an employee’s employment ends (through resignation, termination, or any other reason), the outstanding loan balance becomes due immediately. The employer is required to deduct any outstanding amounts from the employee’s final pay, benefits, or entitlements.
1.7 Liability
The borrower (employee) carries primary liability for the loan. The employer acts as a guarantor under the terms of the partner agreement, and is obligated to cover any unpaid amounts resulting from a failure to deduct or remit repayments as agreed.
2. Credit disbursements
Credit disbursements are a facility-level credit service designed for partner companies to manage payments to their broader network of beneficiaries.
2.1 Who can receive credit disbursements?
The recipients are entered into the system by the employer (or their designated representative). These may include, but are not limited to:
- Employees
- Vendors
- Suppliers
- Contractors
Recipients may be registered on the Payleo platform, but they are treated solely as beneficiaries of the company — the company itself is responsible for the credit facility.
2.2 How credit disbursement costs are calculated
The costs for credit disbursement operations are structured as follows:
| Fee component | Basis | Description |
|---|---|---|
| Administration fee | Percentage of disbursement amount | Covers processing, documentation, and account management for the disbursement operation. |
| Service fee | Per transaction or tiered by volume | Applied to each disbursement transaction to cover platform and payment processing costs. |
| Late settlement fee | Percentage per month on overdue amount, accrued daily | Applies if the company does not settle its credit obligation by the agreed date. |
The specific rates for each component are agreed upon during the partner onboarding process and documented in the partnership agreement. They may vary based on the volume and nature of disbursement operations. Current rates are available on our pricing page.
3. Company credit balance
For both salary advances and credit disbursements, each partner company is allocated a credit balance. This balance is fixed once set and depletes as credit is utilised. The credit balance is determined by:
- Total registered net salaries — the sum of net salaries of all employees that the company has registered on the Payleo platform.
- Contracted credit volume — the amount agreed upon through the partnership contract for the expected volume of credit disbursement operations.
The credit balance is reviewed periodically and may be adjusted based on changes to the company’s registered payroll, credit performance, and contractual terms.
4. Credit information and reporting
In compliance with Section 43 of the Microfinance Act, 2018, Payleo shares credit information with licensed credit reference bureaus (CRBs). This is a regulatory requirement and applies to all credit products.
Credit information is reported as follows:
- Salary advances — recorded against the individual borrower (employee) and against the partner company.
- Credit disbursements — recorded against the partner company.
Credit information includes repayment history, outstanding balances, defaults, and any other details required by the Bank of Tanzania. Borrowers provide explicit consent for this data sharing during the loan application process, in accordance with the Personal Data Protection Act, 2022.
5. Consumer protection
Payleo is committed to the consumer protection principles set out in Section 50 of the Microfinance Act, 2018, including:
- Transparent and fair terms and conditions for all credit products.
- Full disclosure of interest rates, fees, penalties, and repayment obligations before any loan is issued.
- A clear complaints handling and dispute resolution process.
- Protection of personal data in accordance with the Personal Data Protection Act, 2022, and its regulations.
All interest rates, fees, and charges are displayed on the platform before a borrower applies for credit. Payleo will never unilaterally change the terms of an existing loan agreement.
6. Regulatory reference
This document is a summary provided for informational purposes. The complete and unabridged Payleo Lending Policy has been submitted to the Bank of Tanzania as required by the Microfinance Act, 2018, the Microfinance (Non-Deposit Taking Microfinance Service Providers) Regulations, 2019, and the Guidance Note on Digital Lenders Under Tier 2 Microfinance Service Providers, 2024. For the full policy document or any regulatory inquiries, please refer to the Bank of Tanzania.
Payleo Financial Services Limited — licensed under the Microfinance Act, 2018. All credit services are provided in Tanzanian Shillings (TZS) and are available exclusively within the United Republic of Tanzania.