Exim Bank Tanzania Limited has been ordered to pay Msae Investment Company Limited Sh50 million in general damages for providing false credit information about the company to a credit reference bureau firm.

Court documents show that Exim had provided incorrect information to Credit Info Tanzania Limited that showed that the transport company had defaulted on a Sh4.9 million loan.

Msae filed a case with the commercial division of the High Court in 2021, claiming that the bank’s move had denied it a Euro 2.9 million (about Sh7.8 billion) loan it had sought from a foreign company for the supply of 50 trucks and buses.

According to court documents, the credit that was sought from COMTAZ Finance Africa Loan was to be channelled through CRDB Bank Plc.


It all started on April 8, 2020, when the transport firm, unaware it had been put on the list of loan defaulters, approached CRDB Bank for a letter of credit to finance the purchase of the buses.

CRDB Bank turned down the request on the grounds that the company was a defaulter on a Sh4.9 million loan it took from Exim Bank.

In the course of satisfying itself with the credibility of Msae, CRDB was informed by Credit Info that the company had been listed as a loan defaulter.

Msae had disputed the alleged wrong information but unsuccessfully asked Exim Bank for rectification. It claimed the act denied them a Sh800 million loan.



The company argued that the information that it defaulted on a loan was negligently sent to Credit Info Tanzania Limited.

How the debt arose
It all started when Msae drew a cheque for Sh1.8 million from her supplier, Hillary Mauki, without knowing that the account had no sufficient funds.

Strangely, Exim proceeded to effect the payment despite the fact that the plaintiff’s bank account had no sufficient funds to credit the client. It then classified the transaction as a loan.

Exim’s defence
At the hearing of the suit, Exim Bank claimed the debt arose from a cheque that Msae drew on October 30, 2010, for the payment of Sh1.8 million to its client Hillary Gasper Mauki.

The bank said it paid the amount to protect the good relationship it enjoyed with the transport company.

“We had not specifically received any letter for guidance in respect of the plaintiff’s bank account. The information that Msae Investment Company Limited is indebted to the bank for Sh4.9 million is a true account of what transpired,” said a witness in defence of Exim Bank.

In his recent decision, Judge Frank Mahimbali of the High Court sided with the transport company, saying Exim Bank acted negligently in withdrawing Sh1.8 million from Msae’s account.

“Immediately after the defendant had discovered that the plaintiff’s account had no sufficient funds, he was supposed to notify the plaintiff, and, if possible, the transaction requested ought to have been rejected. Worse still, the defendant (Exim) withdrew Sh1.7 million from the plaintiff’s account and proceeded to penalise the plaintiff (Msae) up to Sh4.9 million. Similarly, the defendant went further to report the incident to the BoT credit info as an unserviced loan secured by the plaintiff,” he said.

The judge also rejected Exim’s defence that the incident occurred in normal practice in a banking institution.

“My observation is that it is incorrect to do anything against a customer’s bank account unless there is a due notice. Not doing that and subsequently reporting the plaintiff to BoT’s credit info system suggests ill will against the plaintiff. In my view, there was no legal justification for such an evil report,” he said.

On the other side, the judge turned down the Sh800 million compensation sought by Msae, saying it was not justifiable and the specific damages were not proven to warrant the grant of the reliefs claimed.

The landmark decision of the commercial division of the High Court is a reminder to banks to exercise prudence before reporting loan defaulters to credit bureaus.