Tanzania Investment Bank (TIB) plans to set up two subsidiary banks - TIB Development Finance Institution (TIB DFI) and TIB Corporate Bank.
According to TIB Managing Director Peter Noni, the two subsidiaries will be operating closely, although each bank will be managed differently.
“As we put up our branches across the country, we will have both the DFI Bank and Corporate Bank under the same roof. In terms of accounts, the DFI Bank accounts will be managed separately from the Corporate Bank’s. However, we will have a group DFI board,” Noni told journalists.
He said the bank management was set to table the proposed structure for government’s approval by the end of June, this year, and if all goes well, new developments would start after the approval.
Noni revealed this after concluding the Association of African Development Financing Institutions (AADFI) annual general assembly in Arusha on Wednesday.
According to Noni, the new developments would help the bank manage its development financing plans and serve corporate customers effectively.
“The developments we are planning to do will empower our bank to finance development projects by partnering with the African Development Bank (AfDB) and other financial institutions not forgetting the Small and Medium Enterprises (SMEs), who seriously need funding to ensure the first economic transformation in our country,” said Noni.
Noni assured Tanzanians that his team would ensure TIB performed its duties to the highest required standards.
On the resolution reached by the AADFI, Noni who is the current chairman, said delegates agreed to partner with the government, development partners, international DFIs and the private sector in addressing a huge gap in road infrastructure financing. “We agreed to target SMEs to ensure inclusive growth, strengthen relationship with the AfDB private sector department,” he said.
Noni also said AADFI members agreed to reform and strengthen institutions through consistent subscription to the standards provided in the AADFI potential standard guidelines and rating systems (PSGRS).
Speaking at the closing of the AADFI general assembly, Bank of Tanzania (BoT) Governor Prof Benno Ndulu said it was difficult for Tanzania to convince multilateral institutions that the country needed to set up a development fund institution due to lack of sustainability many developing countries experienced.
“It is important that we have such institutions to enhance competitiveness in the private sector. It is a fact that there is a large infrastructure gap in Africa especially in road infrastructure, telecommunications and electricity. Africa needs over US$80 billion annually to bridge this gap. “Bridging the gap through development financing institutions will not only enhance accessibility to basic services but will also help integrate Africa through connecting its ports, roads and railways as engines to first economic growth,” said Prof Ndulu.
He said TIB and the Agricultural Bank (which is yet to be established) were the tools through which Tanzania planned to seriously invest in road infrastructure, which was currently dominated by the public sector by 75 per cent.