Financial institutions urged to lower interest rates

VICE-PRESIDENT, Samia Suluhu Hassan, has underscored the need for financial institutions to review and lower the 2.5 per cent of interest rate on petty traders to enable more eligible borrowers to get financial services.

The Vice-President made the remarks here yesterday while officiating at the ceremony to open Dodoma Regional Branch for Mkombozi Commercial Bank, noting that the trimming down of interest rate for petty traders will enable them repay the loans on time.

“I appeal to financial institutions to work on this matter (review interest rate) to enable more petty traders to get access to financial services,” said the VP at the event which coincided with the tenth anniversary of the bank.

She urged ‘wananchi’ to cultivate a habit of saving money in banks to enable them get access to a number of financial services, including money transaction within or outside the country.

“A bank client is able to carry out financial transactions while travelling within or outside the country,” observed the VP. She allayed fears to members of the public over the state of the financial sector, noting that the situation has improved after the sector experienced challenges. “Profits in most banks have gone up, and non-performing loans have tremendously decreased,” she said.

The Vice -President commended Mkombozi Commercial Bank for increasing the number of its clients and deposits from 6bn/- during its establishment to the current 20bn/-.

Deputy Finance and Planning Minister, Dr Ashatu Kijaji, said the government has addressed the problem of nonperforming loans in some financial institutions, saying the problem resulted in a serious challenge in the financial sector.

“Previously, some financial institutions would dole out loans to any person without reliable income generating activities, resulting in the problem of non-performing loans,” said the Deputy Minister.

On his part, acting Executive Director of Mkombozi Commercial Bank, Mr Thomas Enock, said his bank has registered great achievements for the past ten years, saying about 33,500 petty borrowers have got loans amounting to 2.97bn/- to date, and that the bank has offered 3bn/-agricultural loans to about 50 farmers.

“Today, the bank opens its branch just three months after opening another branch in Iringa Region,” he said.

Board Chairperson for Mkombozi Commercial Bank, Prof Marcellina Chijoriga, informed that the bank will soon open another branch in Njombe Region to reach a good number of people.

She said the bank has provided the public with a number of opportunities since its establishment, pointing out among the opportunities as employment.

“The bank has also expanded its scope of revenue collection to the government and an opportunity to offer loans to business people and investors,” said the Board Chairperson

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Author: LUDOVICK KAZOKA in Dodoma

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