Tanzania Banking

TANZANIA BANKING ASSETS LIABILITIES 2019

The Tanzanian banking sector recorded a profit before tax of TZS 590 billion in 2019, compared to TZS 313 billion in 2018, representing an increase of 88%.

As of August 2021, there are 48 licensed banks in Tanzania: 35 commercial banks, 5 community banks, 4 microfinance banks, 2 mortgage banks, and 2 development banks.

Total assets of the banking sector reached TZS 33 trillion in 2019, a growth of 9% from TZS 30 trillion in 2018.

Tanzania Banking Sector Liberalization

The Tanzanian banking sector embarked on a plan for financial liberalization in the ’90s in order to sustain the country’s economic growth.

This has been accomplished through the mobilization of financial resources as well as by increasing competition in the financial markets and by enhancing the quality and efficiency of credit allocation.

As a result of the liberalization, new merchant banks, commercial banks, bureaus de change, credit bureaus and other financial institutions have entered the market.

Tanzania Banking Sector Performances

Tanzania’s banking sector recorded a profit before tax of TZS 590 billion in 2019, compared to TZS 313 billion in 2018, representing an increase of 88%.

Total assets of the banking sector reached TZS 33 trillion in 2019, representing a growth of 9% from TZS 30 trillion in 2018.

Major components of the banking sector assets were loans advances and overdrafts (54%), investment in debt securities (16%), and balance with the BoT (8%).

Distribution of the loan portfolio was: personal loans (29%), trade (16%), building, construction and real estate (11%), manufacturing (10%), agriculture, fishing, hunting and forestry (10%), transport and communication (5%), and other sectors (19%).

Total liabilities grew by 9% from TZS 25.7 trillion in 2018 to TZS 28.1 trillion in 2019. Deposits accounted for 77% of the banks’ total liabilities.

Total capital increased by 8% from TZS 4.7 trillion in 2018 to TZS 5 trillion in 2019.

The growth was attributed to an increase in profitability recorded by banks during the period.

Tanzania Banking Sector Consolidation

There were 51 licensed banks in 2019 consisting of 38 commercial banks, 6 community banks, 5 microfinance banks, and 2 development banks.

By mid-2020, the number of banks decreased to 49 with the merger of Mwanga Community Bank (MCBL), Hakika Microfinance Bank (HK MFB), and EFC Microfinance Bank. The newly formed bank was licensed in July 2020 and called Mwanga Hakika Microfinance Bank (MHB).

During the same month, BoT placed China Commercial Bank Limited (CCB) under statutory administration, and in March 2021, it transferred all its assets and liabilities to NMB Bank.

And in March 2021, the National Bank of Malawi plc (NBM) completed the acquisition of a 51% controlling stake in Akiba Commercial Bank.

As of August 2021, there are 48 banks operating in Tanzania.

Kevin Wingfield, CEO of Stanbic Bank Tanzania, one of the largest lenders in the country, commented: “I think consolidation in any industry is natural as there will always be winners and losers. I think given the current COVID – 19 crises this is going to be accentuated, as those organizations that act swiftly and adapt to ensure they remain relevant to their customers will grow and those that are slower or unable to adapt will disappear or be taken over.”

Tanzania Banking Network

The banking institutions in Tanzania had an overall branch network of 957 branches in 2019, compared to 878 in 2018.

Most of the branches were located in the major cities of Dar es Salaam, Arusha, Mwanza, Moshi, and Dodoma.

Dar es Salaam had 290 branches which constituted 30.3% of all branches, followed by Arusha, 68 branches (7.1%), Mwanza, 67 (7%), Moshi, 46 (4.8%), and Dodoma, 41 (4.3%).

In 2013, the BoT introduced comprehensive agent banking guidelines that permit licensed banks and financial institutions to appoint retail agents for their banking services.

This provides a mechanism through which banks can profitably extend their services to previously unbanked lower-income individuals.

In 2019, the overall number of banking agents grew by 51%, from 18,827 in 2019 to 28,358.

Tanzania Banking Sector Outlook

Check our Report on the Tanzania Banking Sector for a detailed overview of the industry, how it is coping with the Covid-19 pandemic, and the consolidation taking place.

Latest Update: 5th August 2021

Sources: Bank of Tanzania (BoT)