KILIMANJARO Cooperative Bank Limited (KCBL) shareholders have approved the required changes to pave way for establishment of the National Cooperative Bank.
The shareholders at the 26th Annual General Meeting (AGM), also, approved the merger between KCBL and Mtwara-based Tandahimba Community Bank (TACOBA) in a bid to establish the envisaged national coop bank.
KCBL Chairman, Dr Gervas Machimu, said that when reading the AGM resolution that the approval of both changes and merging geared at paving way for establishment of the pro coop bank that has national interest in serving cooperative unions in the country.
“The merger of these two financial institutions will speed up building a capital base of 15bn/- required for the establishment of the national cooperative bank,” Dr Machimu said over the weekend.
A recent TACOBA AGM approved turning of the TACOBA from a community to a cooperative bank.
Financial reports showed the KCBL had a capital of 4.4bn/- while TACOBA had 2.2bn/- equals to 6.6bn/-, which is slightly above the regulator capital benchmark of 15bn/-.
“The work ahead is to continue to mobilise the remaining fund to complete the regulatory requirement,” the KCBL Chairman said.
Additionally, the KCBL shareholders meeting approved the establishment of a Cooperative Holding Company (CHC) which will hold 51 per cent stake of Cooperative Bank of Tanzania (CBT) on behalf of interest of cooperative unions.
Tanzania Cooperative Development Commission (TCDC) Chairman, Mr Abdulmajid Nsekela said that CRDB Bank will acquire 20 per cent stake of the new proposed national coop bank.
“CRDB was established as a cooperative bank. Its foundation based to serve cooperative, though was changed three decades to commercial bank,” Mr Nsekela, who is also the CEO and Managing Director of CRDB, said.
Minister for Agriculture, Mr Hussein Bashe, said that the introduction of a national cooperative bank will play a big role in improving the cooperative sector and other economic-based stakeholders in the country.
“The process of establishing a national cooperative bank under the good foundation laid by KCBL is a light at the end of the tunnel for the cooperative sector in the country,” said Mr Bashe in a speech read on his behalf by the Kilimanjaro Regional Commissioner (RC) Mr Nurdin Babu.
He added: “The government through TCDC will continue to give its sincere cooperation by collaborating with the KCBL and other cooperative stakeholders in the country to ensure that a national cooperative bank is established.”
The KCBL General Manager, Mr Godfrey Ng’urah, said that the bank has achieved great success in the past three years after receiving a strategic investment from the CRDB.
“We have paid 40bn/- in various taxes in the last three years,” Mr Ng’urah said during the AGM.
The lender’s deposits increased by 13 per cent to 5.9b/- at the end of last year, while the loan portfolio shoot by 2,400 per cent to 7.6bn/- in the last three years.
“The achievements we registered in the last three years was the results of the support of a strategic investor [CRDB], is a good and solid foundation that will be used to establish the proposed national cooperative bank in the country”, he added.
In 2020 CRDB capital injection of 7.0bn/- centred on boosting liquidity of KCBL, which went through a difficult financial period due to the mismanagement of some of its executives and led the bank to suspend operations. Along with the capital, CRDB also provide human resources to oversee KCBL operations.
