AS it commemorates its 14th birthday, Mwanga Community Bank Limited (MCBL) has registered remarkable success and more importantly reaching the unbanked population to provide them with financial services.
Through lending which is the core business banking, MCBL total loans has been increasing over years to the local community it serves with a view to liberate them from abject poverty. ' For last year, total loans increased by 1.95bn/- to 6.88bn/- compared to 4.92bn/- in 2012.
This is equivalent to 40 per cent increase. Despite of many challenges, MCBL management innovated a range of efficient and quality services relevant to the current market for customers, particularly the unbanked population to access financial services.
Due to increase in lending services, the goals of the interest income in 2013 were reached and surpassed for 423m/- or 32 per cent, while the interest costs were more than the targets by 49m/- or 8 per cent up.
The whole expenditure was below targets by 91m/- or 7 per cent down, although operational costs were high due to expansion of operations in the region after establishing service centres in Moshi, Same.
Mr Ghuhia added that the share capital has increased from 567m/- from 555m/-, which is equivalent to an increase of 12m/- or 2 per cent. In addition, the MD argues that the MCBL total capital increased 1.13bn/- from 1.06bn/-, which is equivalent to an increase of 70m/- or 7 per cent.
Also, the core capital of MCBL increased by 97m/-, to 923m/- in 2013, equivalent to 12 per cent from 826m/-in 2012. The bank's deposits increased by 1.85bn/- or 27 per cent to 8.62bn/- from 6.76bn/- in 2012. The number of clients has grown to 24,455 in 2013 from 6,426 in 2012.
Similarly, the bank's total assets increased by 2.47bn/-, the amount which is equivalent to 32 per cent to 10. 46bn/- in 2013 from 7.99bn/- in 2012. Commenting on the MCBL success story, former Prime Minister, Mr Cleopa Msuya, advised on the need to change the MCBL to commercial bank to enable it spread its wings in other regions.
"I would advise the MCBL leadership to change the name of the bank in its service delivery from people's bank to a commercial bank. This will help spread its wings by opening more branches in other regions and thus help the MCBL grow at a higher level," said Mr Msuya.
Mr Ghuhia proposed to MCBL shareholders to list at the Dar es Salaam Stock Exchange (DSE) in order to increase the bank's liquidity as well as raising capital for enhancing efficiency. The proposal was supported by shareholders although for Mr Ibrahim Seushi, the Board chairman, it is a very long process.
On his part, the Bank of Tanzania (BoT) Auditor, Mr Ephraim Mwasanguti, said proposal to expand the scope of the bank and change the name to become commercial bank was a good although for the central bank it requires 15bn/-. The MCBL Board chairman, Mr Seushi, said that in 2014, the bank has organized itself to raise the amount of deposits, lending, revenue, control expenses and bad debts.
"We expect to increase deposits, loans, shares through our service centres opened in Moshi, Same, and Hedaru as it is in our Business Plan of 2013/17," Mr Seushi added. As a result of 2013, MCBL has set several goals for 2014, whereas in 2015 the bank intends to increase deposits by 1.31bn/- or 15 per cent up, to 9.78bn/- from 8.47bn/- recorded in 2013.
By June 2014 the bank mobilized deposits amounting to 9.56bn/-, which is equivalent to an increase of 1.09bn/- or 12 per cent gain. Also the number of clients increased from 24,455 as at 31st December 2013 to 28,513 as at 30th June 2014 a growth of 4,058 clients or 17 per cent.
He urged MCBL to increase actual bank capital (core capital), to reach 2bn/-by December 2017, as he called upon shareholders to increase their shares in order to enable the bank to grow and achieve its goals of strategic business plan. "Shareholders living in and outside the district should use the bank's services including placing deposits (to open savings accounts or cheque accounts).
By using the M-pesa service a customer can increase his/her deposit in her/her accounts or they can pay their loans without going to the bank. Also the customer can transfer his/her money from his/her account and stash it into M-pesa or other accounts of the MCBL or any bank which is connected to the network of the Umoja Switch banks, or pay bills like TANESCO LUKU, DSTV ,"
Mr Seushi said. The other services which the MCBL provides includes Faidika Account, Accounts for children, Hekima Account, Fixed Deposits Accounts, as well as the ATM services through Umoja Switch, which enables any client to withdraw their money from their accounts anywhere by using the ATM service provided by more than 20 banks in the country.
Until 2011, shares registered in 2011 were 296,436 worth Tsh14,821,800, adding that in 2012 about 1,039,604 shares were sold worth 51.98m/-. In 2013, the MCBL sold about 1,017,737 shares worth 50.88m/-. In 2012, the MCBL paid a dividend of 30/- as bonus shares", due to the profit of 2011, which was 112.5m/- after tax.
In 2006, we paid a dividend of 27.5m/-as an increase in bonus shares. "And in 2007 we paid 27.3m/- as bonus shares. In 2008, we paid a dividend of 48m/-in cash and bonus shares and in 2009 we paid 56m/-as bonus shares," he said. Mr Ghuhia said that such an increase in every year is equal to 20 per cent or 1,000/- per 5,000/- (equivalent to 100 shares).
Due to the small profit after tax of 55.7m/-, the MCBL recommends that a dividend should not be given so that it can remain in the retained profit.
For his part, the Mwanga District Commissioner, Mr Shaibu Ndemanga, promised to manage the issue of the Mwanga Municipal Council to increase its shares as it committed itself and channel its funds through the MCBL, being one of the ways of promoting the bank.
Thus it is high time that the people in Kilimanjaro Region make an efficient use of the financial services provided by MCBL in order to improve their livelihood and contribute to economic growth.
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