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%.
As Africans continue to face challenges around precautionary measures to minimize the risk of spread of the Covid-19 virus, Stanbic Bank is encouraging customers to consider digital banking as a preferred option to visiting a physical branch.
“The safety of our employees and customers is something that we care deeply about and we strongly encourage customers to use Stanbic Bank’s suite of digital banking tools for their financial needs, whether this be from a personal or business perspective,” says Brian Ndadzungira, Stanbic Bank Tanzania Head of Personal and Business Banking.
“Digital platforms provide an efficient, fast, safe and nearly instantaneous solution to many, if not all of your daily banking requirements, away from public spaces,” he adds.
Stanbic Bank’s digital products offer ease and convenience, no matter where the person is located, and replace the need to visit a physical branch. During times like these, digital, contact-free banking will help clients to carry on with their personal and business lives without disruption.
Ndadzungira explains that customers can manage account limits, make payments to local or international beneficiaries, stay connected by accessing prepaid airtime, data and electricity, download and send statements or use mobile money almost anywhere and at any time.
Digital solutions for business owners also make it possible to bank remotely and our relationship managers are available via phone and email to assist wherever possible.
Ndadzungira adds that Stanbic Bank representatives at the call center will be available to assist customers should they require advice or have specific questions related to their financial needs.
“This will likely see a higher volume of calls at call centers, and we are preparing internal systems for this eventuality.”
Stanbic Bank has rigorous business continuity processes and practices in place. These are rehearsed and planned on a regular basis. All the plans are designed to ensure effective business continuity, the integrity of the systems and processes and the safety and wellbeing of the staff and customers. Part of this plan would be to ensure the ability of the employees to fulfill their duties at other locations where the group operates or from home depending on business and personal requirements.
Stanbic Bank has also issued a wide-ranging travel ban. In order to reduce risk to its staff and our communities, they have taken the decision to suspend all cross-border travel on Standard Bank Group business until further notice.
Stanbic Bank adopted the principles recommended by the World Health Organisation and advise staff and contractors who return from high-risk destinations to adopt the fourteen-day self-isolation principle. The high-risk destination lists are reviewed daily to remain relevant.
“Stanbic Bank continues to closely monitor developments on Covid-19 both locally and abroad to ensure precautionary health measures are in place for our employees, clients and all our stakeholders,” Ndadzungira concludes.
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