THE Prime Minister, Mr Kassim Majaliwa, has directed regional authorities across the country to establish community banks to fast track the country’s development, especially in rural areas.
He that each region should set out plans for establishing community bank to support the Fifth Phase government’s determination of strengthening financial services in rural areas. The premier was speaking in Dodoma yesterday at the official opening of Community Banks Association Tanzania (COBAT) stakeholders’ meeting.
The PM said that the government has been taking measures to fight poverty among rural residents. “The government is working on possibilities to empower regions with interests to set up the banks to speed up the process,” Mr Majaliwa said.
He noted according to statistics by March, this year, the country had 63 banks and financial institutions with 725 branches, an indication that the sector has been growing.
Mr Majaliwa further said that the government had set out plans to collaborate with the private sector to ensure that by end of this year 50 per cent of Tanzanians will have access to financial services through commercial and community banks, village community banks, Saving and Credit Cooperative Societies (SACCOS) and mobile phone services.
He observed that according to statistics released by an umbrella organisation responsible for overseeing community banks in the country, there are 100,000 village community banks (VICOBA), which have 2.2 million members with a capital of 1.2 trillion/-.
He added that the country has also 11 community banks, 10 of which are COBAT members. “This number of community banks is small compared to opportunities available and size of our country since 75 per cent of the population is made up of rural dwellers,” Mr Majaliwa noted. He explained that communiy banks were crucial in addressing the challenges associated with financial services delivery.
For his part, Finance and Planning Minister Dr Phillip Mpango said that the meeting drew participants from community banks in 10 regions of Dodoma, Katavi, Kigoma, Lindi, Manyara, Mbeya, Morogoro, Mwanza, Simiyu and Singida to discuss plans on fast-tracking the establishment of community banks in the country.
He told the function that COBAT is made up of 10 banks, eight of which are community banks – namely Mufindi Community Bank, Mbinga, Mwanga, Uchumi, Tandahimba, Meru, Moshi, Mtwara, Njombe and Efatha and two co-operative banks, which are Kilimanjaro Cooperative Bank and Kagera Farmers Cooperative Bank.
He said by end of last year, community banks, which are members to COBAT had 86.3 billion/- as capital, 69.2 billion/- deposits and 56.2 billion/- issued as loans. The banks have about 600,000 clients.
Dr Mpango said that according to 2013 research findings by Finscope, only 57.4 per cent of Tanzanians have access to financial services, out of which only 13.9 per cent accessed formal banking services while 26. 8 per cent don’t have access to the service.
He stressed the need for stakeholders to create awareness on the importance of setting up community banks in the regions.
COBAT Chairperson Elizabeth Makwabe said that poor communication technology and competent banking personnel was among challenges facing community bank operations. She observed that banks’ capital has been growing whereby in 2014 they had 71.2 billion/- while in 2015 it grew to 86.3 billion/-.
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