TADB lauds Tanzanian experience in building resilient DFIs to bolster economy

MASERU: THE Tanzania Agricultural Development Bank (TADB) has joined the African Development Finance Institutions (ADFI) leaders in talks aimed to shape solutions for building resilient DFIs for stronger economies across the continent.

  Speaking as a panelist on the African CEO Forum of African DFIs in Maseru, Kingdom of Lesotho, the TADB’s  Managing Director, Mr Frank Nyabundege, reflected on how the current standards and regulatory frameworks for DFIs in Tanzania is impacting its ability to take on the high risk and long term development projects.

Mr Nyabundege highlighted the Tanzania experience by commending and demonstrating how the country is ahead of many peers in the continent following the Bank of Tanzania’s development of the Banking and Financial Institutions (Development Finance) Regulations, 2021 (GN 766, amended 2023). A dedicated regulated framework that seeks to cater for the functions of DFIs.

However, as much of these efforts have been put in place, Mr Nyabundege highlighted that these frameworks still contain a number of commercial bank DNA, limiting to some extent, the bank to fully function and deliver on its development mandate.

Asked how African DFIs can ensure compliance standards, enhance institutional resilience and continue to deliver on their mandates, Mr. Nyabundege expressed that “prudence and impact are not opposites. Giving an example of how TADB was among the top two best achiever DFIs in the SADC region under the AADFI Prudential Standards, Guidelines and Rating System (PSGR) while still continuing to lend and bring transformation in the agriculture sector.

He further underscored that fundamental importance of African DFIs being regulated by central banks as this strengthens institutional governance, elevates standards, builds trust and attracts capital and funding these banks so need.

Closing his panel with a key message, Mr Nyabundege stated,”For us at TADB, the ultimate objective is to strike the right balance between financial sustainability, creating impact and propelling development. We cannot ignore prudential risks, but equally, we cannot avoid all risks and still expect to transform agriculture. What we need is a regulatory environment that allows development banks to take well managed risks, remain financially sound, strengthen our resilience and deliver the transformation our economies need.”

The Managing Director of the Tanzania Agricultural Development Bank (TADB), Mr. Nyabundege is participating in the Association of African Development Finance Institutions (AADFI) CEOs Forum, bringing together Chief Executive Officers and leaders of African Development Finance Institutions (DFIs) in Maseru, Kingdom of Lesotho. This year’s forum theme is: “Resilient DFIs for Stronger African Economies: Governance, Standards, Regulation and Development Impact”.