Provisioning Estimator
Estimate the regulatory minimum loan-loss provisioning across the classification bands. Enter the outstanding balance per band and the tool applies the Bank of Tanzania minimum rates to the gross balance. An optional management view nets recognized security for an economic picture of exposure.
Regulatory scope: references the minimum provisioning rates under Bank of Tanzania GN No. 679 of 2019, Regulation 45, for non-deposit-taking microfinance service providers, applied to the gross outstanding balance. Important: regulatory frameworks can change. Confirm the current applicable Bank of Tanzania requirements and your institution’s compliance policy before using these results for accounting, provisioning or regulatory reporting.
| Classification | Outstanding | Rate | Minimum provision |
|---|---|---|---|
| Current0–5 days | 1% | 0 | |
| Especially Mentioned6–30 days | 5% | 0 | |
| Substandard31–60 days | 25% | 1,250,000 | |
| Doubtful61–90 days | 50% | 0 | |
| Lossover 90 days | 100% | 3,000,000 | |
| Total | 8,000,000 | 4,250,000 |
How this is calculated
For each band, the estimator applies the referenced minimum rate to the gross outstanding balance, and the total is the sum across all five bands — this is the regulatory minimum. The optional management view separately nets recognized security to show economic exposure; that netting does not reduce the regulatory minimum.
Show the calculation formula
band minimum provision = gross balance × rate
total minimum provision = Σ band minimum provisions
The rate per band is fixed by GN 679 Reg. 45: 1% / 5% / 25% / 50% / 100% for Current, Especially Mentioned, Substandard, Doubtful and Loss. The management view instead computes max(0, balance − security) × rate, flooring each band at zero.
What is loan-loss provisioning?
Provisioning recognizes, in advance, that some loans will not be repaid in full. A proportion of the at-risk balance is set aside according to how far each loan is overdue. It is a core part of prudential regulation and Bank of Tanzania reporting, and the classification band determines the minimum rate.
The management view: net of security
A loan backed by solid, recognized security is less risky than an unsecured one of the same size. The optional management view floors each band’s exposure at zero when security fully covers it, reflecting the amount the lender could economically lose. This is management information only: the regulatory minimum is still assessed on the gross balance and is not reduced by security.
FAQ
What is loan-loss provisioning?
The amount a lender sets aside against loans that may not be repaid in full. The further a loan is overdue, the higher the minimum provisioning rate applied to its balance. It is a core part of prudential regulation and BOT reporting.
What is the difference between the regulatory minimum and IFRS impairment?
The regulatory minimum is a floor set by the applicable framework (here BOT GN 679 of 2019, Reg. 45): a fixed percentage per classification band applied to the gross balance. IFRS impairment (expected credit loss) is your institution's own accounting estimate, applied on top, and may require more than the regulatory minimum. This tool estimates the regulatory minimum, not IFRS impairment.
Does recognized security reduce the regulatory minimum?
No. The regulatory minimum is assessed on the gross outstanding balance. Netting recognized security produces a separate management/economic view of exposure — shown in this tool's optional 'Management view' section — but it does not reduce the regulatory floor.
Which framework and rates does this tool use?
The minimum provisioning rates under Bank of Tanzania GN No. 679 of 2019, Reg. 45 (non-deposit-taking microfinance service providers): 1% (Current), 5% (Especially Mentioned), 25% (Substandard), 50% (Doubtful) and 100% (Loss). Deposit-taking banks and SACCOs are governed by different frameworks the tool does not model.
How do I get the outstanding balance for each band?
Age every loan by days past due into its classification band (use the DPD & Classification Checker), then sum the outstanding balances of the loans in each band and enter those totals here.
Is anything I enter saved or sent anywhere?
No. The estimate is computed entirely in your browser — nothing you type is stored or transmitted to any server. You can export a CSV or print locally.
Provisioning that reconciles itself.
This estimator works one snapshot at a time. Ustawi ages every loan, classifies it, applies the minimum provisioning rate and totals the provision straight from your live portfolio — so the figure you file is consistent with your PAR aging and classification, with no manual re-keying.
