Promoting financial inclusion is MKCB top priority

MKOMBOZI Commercial Bank’s (MKCB) has said its commitment and focus on financial inclusion remains to be key strategic priority as it envisions to reach more unbanked population.

The remarks were made by the MKCB’s Board Chairman Gasper Njuu during the bank’s Annual General Meeting (AGM) held in Dar es Salaam recently.

“We have successfully completed integration with key partners in the provision of digital services especially Mobile Network Operations (MNO) and other digital solution integrators,” he said.

He said they have registered good traction in rolling out Agency Banking Channel (Mkombozi WAKALA), church cash collection solution (SADAKA Digital) and internet banking.

He said they enhanced the mobile banking channel by launching the mobile application in additional to the existing USSD code platform.

“We finalized plans for opening of new branch outlets in Arusha and Mwanza which shall be operating before end of quarter three of this year,” he said.

Mr Njuu said the bank has strengthened human resource base by recruiting key senior officers in strategic segments especially finance and commercial banking.

He said they enhanced the front office sales and service management team across the network that is necessary to support the growth and service excellency ambitions.

He said their business consolidation and growth ambitions continue to bear positive fruits as translated through increased clientele base, enhanced revenue levels, efficient cost management and quality of risk management.

Speaking to ‘Daily News’, recently the MKCB Managing Director Mr Respige Kimati said MKCB has not managed to provide dividends to the shareholders at the end of last year as the lender failed to meet required benchmark standards set by the central Bank of Tanzania (BoT).

According to BoT set standards, a bank is eligible to provide dividends to the shareholders if it has reached a cost of income ratio of 55 per cent or below while non-performing loans (NPLs) have to be below 5 per cent.

The lender’s cost of income ratio climbed up by 62 while non-performing loans (NPLs) went up to 9 per cent, surpassing the BoT’s set of 5 per cent.

Mr Kimati said the bank is still dealing with these challenges of loans and past performance.

For example, over the past three years the Bank has reduced the number of accumulated losses from 11.3bn/- in 2019 to 1.49bn/- currently.

It is from this achievement that the bank managed to increase its capital and provide more digital services.

“The funds have helped to increase the bank’s capital as it is their expectation that they will complete their strategy this year and start earning accrued profits, which will enable to build the ability to pay dividends to our shareholders,” he said.

He said last year the credit rate increased by 8.17bn/- to 115.03bn/- compared to 106.86 for 2021.

“This increase was due to efforts to increase small loans which enabled the increase in the number of Solidarity Group Loans (SGL), increasing by a total of 2.10bn/- to 5.73bn/- compared to 3.64bn/- in 2021,” he explained.

Mr Kimati said that although the bank’s revenues are largely derived from interest income, they continue to work on promoting non-interest income to improve the productivity and efficiency of the business.

Despite the high investment in infrastructure and operating resources year-on-year, operating costs have decreased by 8 per cent to 15.90bn/- last year from 17.28bn/- in 2019.

Mr Kimati said they have been able to provide digital services to expand access to banking services.

“We offer our services in partnership with agents who have registered 476 agents to provide online banking, also we have more than 600 customers who access our services online,” he said.