BANKS have made some progress in tackling non-performing loans (NPLs) but there is more work to do, the Deputy Minister for Finance and Planning, Dr Ashatu Kijaji has said.
Speaking at the inauguration of Azania Bank new branch in Dodoma yesterday, she said banks need to step up efforts in addressing the NPLs problem and reduce operational costs so that they can serve their customers at a lower cost compared with the current situation.
“I know for sure that unfaithful staffs are the source of NPL and that’s why I strongly ask for the boards and managements of these institutions to take action in line with reducing operating costs because the government will not tolerate any negligence in the implementation of this,” she said.
She commended the recently move by the Bank of Tanzania (BoT) to lower interest rates so as to boost credit to the private sector which had rapidly dropped in the past two years.
The central bank of Tanzania (BOT) revised its discount rates downwards to 7 per cent from 9 per cent in August to help in boosting credit growth which had steeply declined in the past two years.
A year ago, the Bank of Tanzania cut its discount rate from 12 per cent to 9 per cent.
She expressed her satisfaction by the way the bank was improving small and medium entrepreneurial activities in the country, something that had so far contributed to improving various sectors including small industries.
Speaking during the ground breaking ceremony to inaugurate the new branch here, the Bank’s Managing Director, Charles Itembe said currently his bank has 19 branches countrywide including the new one opened in Dodoma which will be known as Sokoine-Dodoma.
“Our current main strategic objective is to expand our network by establishing at least three branches each year as well as increasing our market share by at least 3 per cent in three years,’’ said Mr Itembe.
The MD added that the bank’s other objectives were centred at elevating the bank to Tier One within five years of strategic business objectives.
On why the bank decided to inaugurate a new branch in Dodoma, Mr Itembe said Dodoma was a fast growing region which is in the centre of the country and that it is the headquarters of the country, meaning, all government activities are conducted here.
Mr Itembe further insisted that by elevating Dodoma municipality into city status, the government put his bank at the best position as growth of the city needed more financial services on its daily business.
“In supporting president Magufuli’s industrial agenda, there should be strategies to boost income through strong financial services and Azania Bank Limited is committed to make this a reality in collaboration with the government and all citizens,’’ he noted.
On his part, the bank’s chairman of the board of Directors, Mr Eliud Sanga said the bank was performing well in strategic objectives and performance and that is why during the financial year ending December 2017, the bank acquired profit amounting to 1.8bn/- from the loss of 6bn/- it got in its previous financial year.
That helped the bank to provide a handsome dividend to its shareholders, he said.