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Interview with Edwina Agnellus Lupembe, MD of Mkombozi Commercial Bank


TanzaniaInvest interviewed Mrs Edwina Agnellus Lupembe, Managing Director of Mkombozi Commercial Bank. She shares interesting insight on Tanzania’s banking sector and her bank, and on the country’s economic development and investment opportunities.

TanzaniaInvest: What is your view on Tanzania’s banking sector current situation and next evolution


Edwina Agnellus Lupembe: Development in the financial sector, in particular, the banking sector has played a key role in stimulating and stabilizing economic growth in Tanzania.

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The Tanzania banking sector has continued to demonstrate steady growth over the past years.

As a result of implementations of the financial sector reforms initiated by the Government of Tanzania in 1991, currently there are many fully-fledged commercial banks and financial institutions operating in Tanzania.

The current multitude of banks and financial institutions have brought stiff competition in the industry, introduced many products and services to the diverse users of financial services.

This move is revolutionizing the whole practice of the Tanzania economy which depended on the cash economy to next generation of non-cash economy.

TI: What is Mkombozi Commercial Bank current positioning and core businesses?

AGL:Mkombozi Commercial Bank (MKCB) core business is provision of financial services to micro and macro customers in Tanzania.
{xtypo_quote_right}Mkombozi Commercial Bank (MKCB) core business is provision of financial services to micro and macro customers in Tanzania.{/xtypo_quote_right}

The bank is only over three years old, however, it has managed to position itself on providing high quality and integrity banking services to small, medium sized enterprises and corporate businesses such as companies, Savings And Credit Co-operative (SACCOS), Schools and Universities.

The bank is aiming to grow further to reach more people who need bank services in few years to come.

TI: What are your bank’s competitive advantages?

AGL: The bank has the Board of Directors which has broad and rich experience that is useful in guiding the bank’s activities.

Management and staff of the bank have a genuine commitment for excellence and well- focused shared vision and commitment and support from the Roman Catholic Church institutions countrywide, who view it as an institution intended to serve an under serviced sector of the population of Tanzania.

All Banks provide the same services the only advantage that we have in this respect is we provide fast, reliable services with great integrity. The motto of our bank is “a bank with integrity”.

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

AGL: To innovate new banking products & services to fill in the vacuum of a large portion of unbanked local population of the economy left by other banks.This involves, opening of more branches countrywide.

We are geared to support the Government’s endeavour to fight poverty in the country.

The challenges ahead are enhancement of customer service, innovations in technology, improvement of risk management systems and diversifying products.

There is also the stiff competition from the other banks and market dynamics that we have to live with.

TI: Mobile money is experiencing incredible popularity in Tanzania. How is this influencing your development strategy?

AGL: Mkombozi Commercial Bank lives and breathes innovation – it’s in our DNA.

Our bank is driven by market insights, existing and emerging consumer preferences and has a culture of innovation which includes an innovation framework and/or processes that are supported by all levels of management.

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{xtypo_quote_left}Mobile money is in our development strategy and we are about to introduce this service to the market with our brand name{/xtypo_quote_left}Thus Mobile money is in our development strategy and we are about to introduce this service to the market with our brand name ‘Mkombozi Bank Plus’.

TI: Which other new products and services you plan to introduce?

AGL: We are planning to introduce Mobile Banking, Elimu Account, Integrity Account and Agency banking to this market.

Mkombozi ´s motto is “the bank of Integrity”. Which Corporate Social Responsibility (CSR) programmes are in place to also implement this vision of integrity?

For Mkombozi Commercial Bank Plc, CSR has been an inherited and inbuilt element of its culture from the day the bank was founded.

Our Founder’s values and ethos based on trust got embedded in the bank’s policies and principles which reflect on its day to day business.

CSR in Mkombozi Commercial Bank Plc began with the first act of cultivating banking habits in an agrarian society – to effectively utilize idle money for productive purposes.

Creating employment opportunity for a predominantly poor community was phase two.

The Bank is a commercial entity. It has to carry out its operations to generate profits to fulfill its responsibility to all stakeholders.

However, its activities are carried out in the society and it owes to the society for its business prosperity.

While carrying out its activities the bank is duty bound to ensure that its products and services serve the best interests of the society.

The bank has approved a policy for Sustainable Development, which ensures that Bank’s activities are conducive to sustainable social welfare.

In addition to this, the bank directly participates in social activities to help the development of specific areas/segments such as education for the needy, health and provision of social services.

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

AGL: During late years economists came with the argument that Foreign Direct Investment (FDI) is one of the way of developing Tanzania’s stagnate economy.

FDI represents combination of capital, stock, know-how and technology.

Majority of FDI orthodoxy continue to believe FDI is the only potential source of bridging the gaps in capital development, exploitation of resources and participation in the international markets.

However, the argument is inconclusive. To be fair through FDI there is potential direct contribution to economic growth and technological improvements.

Such potential contribution depends on the type of FDI. For developing countries such as Tanzania, FDI is supposed to be a means of acquiring a new technology.

The cheerleaders of FDI once argued that through privatizations (acquisition) of local firms to the foreigners, we will be able to rehabilitates those firms to be productive again.

They argued that FDI will inject new technology and spillovers the know-how knowledge which will resuscitate stagnant industry.

{xtypo_quote_right}upgrading of local industries can only happen by knowledge transfer and by creation or upgrading of linkages with domestic economy{/xtypo_quote_right}However, they missed the point when it comes to upgrading of local industries; it can only happen into two ways.

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First, by knowledge transfer to acquired firm, and second, by creation or upgrading of linkages with domestic economy.

Research shows that FDI tend to increase output or productivity through introduction of new technology.

However, that is not the case to majority of the foreign firms which acquired our local firms.

We saw in Tanzania Telecommunications Company Limited (TTCL). The company which acquired it didn’t upgrade TTCL into more advanced technology, instead it layoff massive amount of people.

When it comes to Tanzania majority of FDI came for the purpose of Natural Resources.
They’re extracting these resources and ship them to their countries as raw materials, and that disprove the whole theory of FDI link to development of domestic economy.

Generally speaking, we need to stop thinking that foreigner will transform our economy to a more advanced one.

There is a need of renewing our patriotism toward our country.

TI: Which role to you aim to plain within this framework?

AGL: Mkombozi Commercial Bank is a bank with one of the fastest growing client base in the country.

We serve multiples of clients. We offer a complete range of financial services to help clients achieve their goals.

We provide strategic advice, lend money, raise capital, help manage risk, and extend liquidity.

Across our business, our goal is to assist clients succeed, contribute to orderly and well functioning markets and support global economic growth.

One of the most important functions we serve is extending credit to companies to help them grow.

We were founded more than 3 years ago and have a proud history of, in the words of one of our founders, doing “only first-class business… in a first-class way.”

TI: How would you describe Tanzania’s socio-economic framework to investors?

AGL: Tanzania’s economy has been resilient to shocks and is expected to remain buoyant with a GDP growth forecast of 7.1% in 2013 – well above the regional averages.

Services, industry and construction continue to be the driving forces. However, frequent power outages continue to hurt potential output.

Unemployment is becoming a concern with nearly 2.4 million unemployed people – most of them young – representing 10.7% of the population.

The effects of the current global crisis, though not yet showing up in the statistics, could create additional challenges, in particular with respect to the tourism industry and export-oriented sectors.

Tanzania enjoys an abundance of natural wealth which offers tremendous investment opportunities.

It has abundant tourist attractions that are mostly underutilized.

It’s climatic and soil conditions give it comparative advantage in farming of a variety of crops.

It has mineral wealth largely still unexploited, and bundant trainable and inexpensive skilled labor force.

{xtypo_quote_left}Tanzania’s economy has been resilient to shocks and is expected to remain buoyant with a GDP growth forecast of 7.1% in 2013 – well above the regional averages{/xtypo_quote_left}Tanzania is a country where opportunities abound.

Investors are welcome to bring along capital, technology and expertise so that these limitless opportunities could be tapped for the mutual benefit of the investors and peoples of Tanzania.

Some proactive companies from the globe have already set their footing in Tanzania including those who have invested in Petroleum exploration, Tourism, mining and many more other sectors.

Opportunities are Limitless. I welcome foreign investors to come and grow with us.

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