Tanzania, Sept. 1 -- Dar es Salaam. Tanzanians running or joining informal savings schemes outside the country's legal framework risk fines, imprisonment or both, the Bank of Tanzania (BoT) has warned.

The warning comes amid growing use of informal savings arrangements commonly referred to as upatu in Swahili, in which groups of people contribute agreed amounts and distribute the pooled funds among members in turns.

Speaking during a BoT seminar for artists in Dar es Salaam, an officer from the Directorate of Financial Sector Supervision, Mr Joseph Lubava, said the law does not recognise upatu arrangements operating outside the prescribed framework.

"Upatu is invalid, and by doing so, it is an offence for the person operating the upatu...