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Badilisha Lugha KISWAHILI

Banks provide more loans despite worrisome defaults

21st March 2012

Banks in Tanzania have increase general provision of performing loans by 0.75 per cent despite an extremely low non-performing loan ratio of less than 0.50 per cent.

The remarks were made yesterday by Diamond Trust Bank Tanzania (DTB) chairman Abdul Samji during the launch of the bank's annual results, adding that Tanzania has continued to adopt prudent risk management practices.

“Focusing on alternative banking channels - this follows the launch of internet banking services in 2011 and the planned launch of mobile banking services later this year”, Samji stressed.

According to him, DTB Tanzania would continue on its growth trajectory, anchored on expanding its network with the aim of covering all major commercial centers in Tanzania over the medium term.

Samji further stated that “the success achieved in the year 2011 is a re-affirmation of the twin-pronged long-term strategy of building a robust liability franchise and practicing a strong credit culture despite the adverse macroeconomic environment that set in at the tail end of the year”.

On the back of sustained business performance, most well run banks in the country with low default rates but growth rates higher than industry average with 2011 pre-tax profit rising by 44% from 7.1bn/- in 2010 to 10.2bn/- in 2011.

Following the announcement of the results, the bank’s board recommended a dividend of 40/- per share compared to 35/- paid last year, an increase of 14 per cent on each year.

Moreover, the deposit base grew by 22 per cent from 221bn/- in 2010 to 269bn/- over the corresponding period ending December 2011. Tanzanians' desire for loans went up by 30 per cent, to stand at 193bn/-.

For her part, a bank's client, Hellen David, said she appreciates the efforts done by DTB on improving its services, especially on the provision of loans, since it has enabled her children to go to school.

“With favorable conditions on loans one is able to borrow a large amount that will satisfy his or her needs”, David noted.

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