Small-scale Miners’ bank set to open new financing avenue for Tanzania’s mining sector

DAR ES SALAAM: THE Bank of Tanzania (BoT) has given the green light for the establishment of a bank dedicated to serving the country’s small-scale miners, opening a new financing avenue for the sector.

BoT Governor, Emmanuel Tutuba approved the request noting that the central bank was ready to receive a formal application from the Federation of Small-Scale Miners’ Associations of Tanzania (FEMATA) and guide them through the licensing process.

Speaking during a special meeting between BoT and small-scale miners in Geita, the Governor  said the proposed bank could become a strong financial institution if miners pooled their resources and adhered to regulatory requirements.

“If you unite and pool your resources, you can establish a strong bank that will continue making a positive contribution to our mining sector,” Mr Tutuba said.

He, however, cautioned that approval of the initiative did not mean that regulatory requirements would be waived, stressing that the proposed institution must meet legal requirements on capital, governance, management and the source of funds before being licensed.

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He said the bank’s capital must meet the legally prescribed threshold and be sourced from funds that are not borrowed, while its board and management must have qualified, experienced and trustworthy professionals without conflicts of interest.

Additionally, he stated that the association will also be required to develop a lending policy and submit it to BoT for review and approval, with the policy specifying the types of loans the bank would provide.

“Make sure you build a strong internal system, including information technology infrastructure capable of safeguarding customers’ funds and controlling risks associated with money laundering,” he said.

The governor said Tanzania’s banking sector operates under international standards designed to maintain financial stability and ensure banks have adequate capital and effective risk-management systems.

Moreover, he said that the central bank will provide technical support and assign experts to work with the proposed institution during its initial years, including guidance on recruitment, management and addressing operational challenges.

“Those experts can continue guiding and educating you until you have a stronger and better bank,” he said, urging FEMATA to ensure transparency and professionalism throughout the establishment process.