TANZANIA FINANCIAL SECTOR REGISTERS STEADY GROWTH

Tanzania financial and banking sector has remained sound and stable with levels of capital and liquidity above regulatory requirements.

The Bank of Tanzania (BoT) Monetary Statement for the mid-year to December 2015 shows that the ratio of core capital to total risk weighted assets and off-balance sheet exposures was 17.5 per cent above the minimum legal requirement of 10 per cent.

Similarly, the ratio of liquid assets to demand liabilities stood at 37.4 per cent which was within the minimum regulatory limit of 20 per cent.

The quality of the banking sector’s assets improved as reflected by the ratio of non-performing loans to gross loans, which decreased to 6.4 per cent from 6.8 per cent recorded at the end of December 2014.

The sector continues to maintain steady growth with total assets growing by 19.3 per cent to 26.92tri/- in December last year compared to 22.55tri/- recorded in corresponding period.

Deposits continued to be the main funding source in the banking sector assets, accounting for 75.3 per cent of total liabilities. The remaining funding gap was largely bridged through shareholders’ equity.

The positive banking sector growth is witnessed by the emergence of new institutions starting business, including the Tanzania Agricultural Development Bank (TADB).

BoT continued to implement prudential measures to strengthen risk management practices in the financial sector. In this regard, the Social Security Schemes Investment Guidelines 2012 were reviewed and issued in September last year to incorporate various developments that have happened in the pension sector.

The move will enable the central bank to effectively discharge its mandate of supervising financial matters of the pension funds.

Meanwhile, Mortgage Finance Regulations, 2011 were reviewed and gazetted in June last year to align them with developments in the market and to address issues encountered in the practical implementation of former regulations.

Also, the Foreign Exchange or Bureau de Change Regulations 2008 were reviewed and gazetted in June to include additional minimum capital and allowance of bureau de change under class B category to undertake money remittance services.

Daily News