The Tanzanian banking sector embarked on a plan for financial liberalization in the 90’s 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.
As of March 2015 there are 56 licensed banks and other financial institutions in Tanzania, versus 38 in 2009.
Tanzania Banking Network
According to the latest banking report of the Bank of Tanzania (BOT), the banking institutions in Tanzania had an overall branch network of 702 branches in 2014, compared to 642 in 2013.
Most of the branches were located in major cities of Dar es Salaam, Arusha, Mwanza, Mbeya and Moshi.
Dar es Salaam had 255 branches which constituted 36.32% of all branches, followed by Arusha, 50 branches (7.12%), Mwanza, 46 (6.55%), Mbeya, 38 (5.41%) and Moshi, 32 (4.56%).
In 2014, the overall number of banking agents grew by 180%, from 591 in 2013 to 1,652.
This is a result of the comprehensive agent banking guidelines introduced by BOT in 2013 that permit for the first time licensed banks and financial institutions to appoint retail agents for their banking services.
Accordingly, the introduction of agent banking provides a mechanism though which banks can profitably extend their services to previously unbanked lower income individuals.
Tanzania Banking Sector Performances
Total assets of the banking sector reached TZS22.5tn in 2014, a growth of 15.11% from TZS19.5tn in 2013.
Major components of the banking sector assets were loans advances and overdrafts (53.26%), cash, balance with banks and items for clearing (21.27%), and investment in debt securities (17.36%).
Distribution of the loan portfolio was: trade (21.85%), personal loans (17.10%), manufacturing (11.16%), building, construction and real estate (9.02%), agriculture, fishing, hunting and forestry (8.98 %), transport and communication (7.07%), and other sectors (24.82%).
Total liabilities grew by 14.81% from TZS17tn in 2013 to TZS19.5tn in 2014. Deposits accounted for 89.91% of the banks’ total liabilities.
Total capital increased by 17.10% from TZS2.5tn in 2013 to almost TZS3tn in 2014.
The growth was attributed to the entrance of new banking institutions, retention of profits and additional capital injection, BOT indicated.
Tanzania’s banking sector recorded a profit before tax of TZS528b in 2014, compared to TZS461b in 2013, representing an increase of 14.64%.
All you need to know about home loans in Tanzania, by Stanbic Bank.
Homes are often a representation of something larger than a physical structure; they are a monumental step forward in life.
A home symbolizes security, stability, and success. Understandably, these feelings are attached to home ownership, as shelter is a basic human need providing security and safety.
Now home loans have become an increasingly accessible avenue into home ownership.
Hopeful homeowners are now only required to have an equity payment of 20%. Once the equity payment is available the bank will finance up to 80% of the value of the property.
Securing the finances for a home is the first step, next is the monthly payments, which should not exceed 40% of the monthly income.
It is advisable to exercise caution and avoid loans that will make it difficult to meet the obligations of monthly payments.
Additionally, in order to secure a home loan, a title deed will be required. It is an important document that legitimizes land ownership and gives the bank assurance of assets.
Other documents to support the application process include identification and existing loan history.
Home loans are not restricted to outright purchases but also apply to building and home renovations.
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