Interview with Edmund Pancras Mkwawa, MD of DCB Bank Tanzania

TanzaniaInvest interviewed Edmund Pancras Mkwawa, Managing Director of DCB Commercial Bank Tanzania, as he shared insight on Tanzania’s banking industry, the role of the bank in the country’s economy and DCB’s contribution to economic and social development in Tanzania.

TanzaniaInvest.com : DCB was incorporated in 2001 as a regional bank to receive only in April 2012 a national commercial banking license. You have been the MD of this bank since it early beginnings. What was DCB original aim and what is the current one?

Edmund Pancras Mkwawa : As a regional bank, DCB’s original aim was to contribute to the ongoing economic and social development of Dar es Salaam region by developing specialized micro-finance products and services and marketing these through an efficient and sustainable bank network where the customer is treated with promptness and responsiveness.

As a commercial, the aim of DCB Commercial Bank Plc is to contribute to the economic and social development in Tanzania for Individual, Micro, Small and Medium Enterprises, and Corporate by developing specialized financial products and services and marketing these through an efficient and sustainable branch network where the customer is treated with promptness and responsiveness.

TI : What is your bank’s current positioning and core business in Tanzania?

EM : Since its inception in 2002, DCB has been increasing its branch network, increase its assets and capital and making profit. The asset base is more than TZS 117.4 billion.

DCB’s core business is to contribute to the economic and social development in Tanzania for Individual, Micro, Small and Medium Enterprises, and Corporate{xtypo_quote_right}DCB’s core business is to contribute to the economic and social development in Tanzania for Individual, Micro, Small and Medium Enterprises, and Corporate…{/xtypo_quote_right} by developing specialized financial products and services.

TI : DCB bank listed at DSE in 2008. How would you asses the results of listing to date? Why is in your opinion DSE still struggling to pick up?

EM : DCB was the first bank in Tanzania to be listed on Dar es Salaam Stock Exchange in September 2008. DCB’s share prices have been performing well in the stock market e.g. from Tsh 280 December 2008 to Tsh 620 today. In 2011, DCB emerged the best performing stock market in East Africa and fifth in Africa.

TI : With now 50 banks and financial institutions and a total population of 45 million, competition is intense in the Tanzanian banking sector. What are your competitive advantages?

EM : Despite changing the status from a regional bank to a fully fledged commercial bank, DCB offers a various loan facilities that suits different groups of people in the society. Our loan scheme enables a customer to graduate from one level to another with competitive interest rates.

Our loan facilities include: Solidarity Group Lending (SGL), Super Solidarity Group Lending, Micro Individual Loans, SME Loan, Corporate Commercial Loan, Salaried Loans, Housing Microfinance Loan, DCB Mortgage Loan, Equipment/Investment loans and Overdraft facilities. Furthermore, DCB is proud of its ability to treat customer with promptness and responsiveness.

TI : What are your objectives in terms of business development and what are the challenges ahead?

EM : DCB’s objectives are as follows: Mobilizing financial resources from individuals, institutions and development partners for financing the informal sector in order to support the government’s endeavors in poverty alleviation.

Providing an enabling environment for self-employment for the unemployed population in Tanzania. Providing commercial services and support to the target group at truly unsubsidized ‘full cost recovery and a profit margin’ rates in order to enable the bank to consolidate itself and maximize returns to its shareholders.

The challenges facing DCB ahead include: Increase of competition from both local and foreign banks, cope with advance and expensive technology, come up with more innovate products and service to suits the needs of customers.

TI : Mobile money, is experiencing incredible popularity in Tanzania. What is your view on this product for the purpose of financial inclusion of the wider population?

EM : The introduction of mobile money in Tanzania has been a big threat to the banking sector in Tanzania. This is due to the reason that about TZS 12bn revolves around the mobile network operators (MNO) mobile payments systems on daily basis.

Now the challenge facing banks here is how to get this cash out of mobile payment system to banking payment system. Mobile money could be deposited in banks and hence boost deposit portfolio of the banks, increase non interest income of the banks due to money transfers and increase cashflow.

TI : What is your view on Tanzania’s banking sector current situation and possible evolution?

EM : Tanzania’s banking sector is growing tremendously. Over the past 15 -20 years, the banking sector has undergone major reforms from government owned and controlled system to a liberalized financial sector. The key elements of reform being: restricting of state owned financial institutions, amendments of Bank of Tanzania’s role in supervising and regulating financial institutions, liberalization of interest rates{xtypo_quote_left}Tanzania’s banking sector is growing tremendously. Over the past 15 -20 years, the banking sector has undergone major reforms…restricting of state owned financial institutions, amendments of Bank of Tanzania’s role in supervising and regulating financial institutions, liberalization of interest rates…{/xtypo_quote_left} and allowing the introduction of local and private financial institutions in the market.

In addition, competition among banks is very stiff, technology is becoming more advance and expensive. Furthermore, every year, all banks are coming up with new innovative products and services to suits needs of their customers.

TI : What new products and services you plan to introduce in this market?

EM : DCB plans to introduce the following products for the purpose of moving its services closer to its customers and boosting deposits: Agency banking, B-Pesa and Internet Banking.

TI : Banks in Tanzania have a critical role in assisting the socio-economic development of the country. How do you undergo such role?

EM: Since inception in 2002 the bank contributed more than TZS 62.7 Million to various social programmes including consoling the affected members of the society from calamities in Mbagala and Gongolamboto bomb blast, secondary school desk and chairs donations, Mosquito nets, beds and mattresses to Dar es Salaam Municipal Hospitals and Military Hospital of Lugalo, Unguja and Pemba, donation of school buildings and educational materials and uniforms for pupils affected by floods in Dar es Salaam in December, 2011.

In May this year, DCB will donate oxygen concentrators to three Municipal Hospitals in Dar Es Salaam region.

TI : The Tanzanian economy is expected to maintain its strong growth, combined with increasing FDI, also thanks to the uprising oil & gas industry. On which sectors do you have the greatest expectations?

EM : DCB expects to collaborate with external investors such as African Development Bank (AfDB) to enhance stakeholders economical and social welfare as to increase the Banks customer base, loan portfolio as well as strengthening business relationship with foreign investors.

The Bank shall benefit from the economic growth as well as FDI because stakeholders shall grow their economies as the country grows, increase their depositing capability and set loans for their business enhancement hence increase the banks deposit & loan portfolio

TI : Which role do you aim to play?

EM : DCB is dedicated at contributing to the economic and social development in Tanzania for Individual, Micro, Small and Medium Enterprises, and Corporate by providing specialized financial products and services and delivering these them through an efficient and sustainable branch network and treat the customers with promptness and responsiveness to grow their economies.

The bank has strategies in place to attract foreign investors to boost the financial and technical capabilities of the SMEs in Tanzania.

TI : You have a long track record in banking and business in Tanzania. How would you describe what Tanzania is all about?

EM : Tanzania is a peaceful country in Africa and its economy is growing at a very fast. Tanzanian government has create favorable and conducive environment that enable both local and foreign investors to do business in the country.{xtypo_quote_right}Tanzanian government has create favorable and conducive environment that enable both local and foreign investors to do business in the country.{/xtypo_quote_right} The great reforms carried out in Tanzania have assisted to improve business operations in the country and diversify the banking sector by increasing number of players and competitions within the industry as well.

TI : What is your personal piece of advice to investors?

EM :  I would like to take this opportunity to advice investors the following: Investors are advised to venture and invest in technological projects especially in Tanzania where technology is growing.{xtypo_quote_left} Investors are advised to venture and invest in technological projects especially in Tanzania where technology is growing.{/xtypo_quote_left} The government of Tanzania put forward policies that created a conducive environment that enables both domestic and foreign investors to do business freely in the country such as duty free for software investment and development.

Furthermore, the government has improved and invested more in infrastructure e.g. building more five star hotels, airports, roads and has put forward appropriate measures that eliminate corruption in the mining, construction, natural resources and tourism sector.