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| The new CRDB Bank chief executive, Mr Abdulmajid Nsekela. |
The Finance and Planning Minister, Dr Phillip Mpango held discussions with the new chief executive officer for CRDB Bank Plc late last week where he (Dr Mpango) said the government expects the country’s largest lender (by asset size and customers’ deposits) to increase lending to agriculture. He also asked CRDB and the entire banking sector to consider further reductions of interest on loans while cautioning the banking industry against illegal activities such as money laundering.
Dar es Salaam. The new CRDB Bank chief executive, Abdulmajid Nsekela, has pledged full support for the government’s financial inclusion push.
Additionally, he said the lender would implement a comprehensive strategy aimed at contributing more to economic growth and job creation. The promise comes at a time when statistics show that Tanzania’s financial inclusion agenda is doing well, being driven largely by mobile money transactions. However, banked Tanzanians are still below 20 percent of the country’s adult population.
Speaking during a meeting with the Minister of Finance and Planning, Dr. Philip Mpango, in Dar es Salaam, Mr. Nsekela said CRDB Bank would partner with various government institutions to increase the number of Tanzanians who have access to banking services.
"We have been supporting farmers and the entire agribusiness value chain for years…We support fishing and dairy farming…We have also set a goal to reach all districts by the year 2022. We have tailor-made products that cater for the needs of all segments from the affluent, corporate, small and medium enterprises to the food vendor,” he said.
Earlier, Dr. Mpango proposed a number of measures that CRDB could consider in its endeavor to play a greater role in economic growth.
He asked the bank to increase funding for agriculture. Doing so, the minister added, would hasten the pace of economic growth, noting that 76 percent of Tanzania’s population actively engages in crop cultivation, fishing and animal husbandry.
Dr. Mpango also asked CRDB and the entire banking sector to consider lowering their interest rates. “These high-interest rates are prohibiting people from going for bank loans. They are an obvious cause for the slowed uptake of credit facilities, especially among low-income earners and the informal sector,” he said.
Dr. Mpango called for concerted efforts between the government and the banking sector to address the issue of responsible borrowing. “I want to urge you (CRDB Bank) to focus more on the quality of loans.
I believe the worst is over and we must strive to move away from bad loans,” he said, challenging the banking sector to fortify their internet banking infrastructure to mitigate risks associated with online transactions.
Dr. Mpango cautioned the banking industry against illegal activities such as money laundering, saying such malpractices will not be tolerated.
The CRDB Bank board chairman Ally Laay exuded confidence in the bank’s new strategic direction to grow customer numbers and increase its credit portfolio.
He said CRDB also seeks to reduce the level of nonperforming loans (NPLs) to meet those recommended by the sector’s regulator, the Bank of Tanzania (BoT).
Until the end of last year (2017), the ratio of CRDB Group’s NPLs to total gross loans stood at 12.7 percent.
The sector’s regulator, the Bank of Tanzania, recommends NPLs of not more than five percent.
“We want to bring the NPLs down to an average of eight percent and further down to five percent in the next financial year,” said Mr. Laay.
This, he said, will be achieved by giving flexible repayment terms as well as increasing the number of loans issued.
The Citizen
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