CRDB seeks bigger pie of planned Co-op Bank

Moshi. With only months remaining before President Samia Suluhu Hassan inaugurates the Cooperative Bank of Tanzania (CBT), CRDB Bank wants to get a bigger share of the project.

Speaking here during a meeting with members of the Parliament’s Committee on Industry, Trade, Agriculture, and Livestock, the CRDB Bank Group chairman, Dr Ally Laay, said doing so would see the bank play a key role in the advancement of Tanzania’s financial inclusion agenda.

The meeting, chaired by the committee’s vice chairperson, Ms Mariamu Mzuzuri, was meant to get updates on the process of establishing the CBT, which began in 2012.

According to the Finscope 2023 survey, only 22 percent of Tanzania’s population makes use of banking services.

“With the economy of our nation largely dependent on agriculture, many farmers don’t have bank accounts because they live in rural areas. This cooperative bank will take banking services closer to them,” said Dr Laay.

In 2020 CRDB Bank provided Sh7 billion to rescue the Kilimanjaro Co-operative Bank Limited (KCBL Bank) from collapsing.

Since the strategic investment, over Sh16.8 billion has been collected to establish the new CBT, which will spring up from KCBL. CRDB Bank Plc has also invested in the Tandahimba Community Bank (Tacoba).

“These funds were provided not as a loan but as part of an ownership stake,” he said.

In her remarks, Ms Mzuzuri commended the government for the progress so far made towards the establishment of the CBT and emphasised greater diligence to ensure that goals are achieved as planned.

She said CRDB Bank’s request to increase investment in the new bank was negotiable.

Presenting the plan for establishing the bank, the General Manager of KCBL Bank, Godfrey Ng’urah, said it aims to increase alternative income sources for cooperative societies, provide competitive services to reach more people, and offer financial products that meet the needs of cooperative members.

“There are long-term goals from 2024 to 2030 to increase the capital of the National Cooperative Bank to Sh100 billion. Along with CRDB Bank, which will own 20 percent, the management of KCBL Bank is negotiating with external institutions such as Rabobank, the International Finance Corporation, the African Development Bank, and the Coop Bank of Kenya to invest in CBT,” said Ng’urah.

Although the plan to establish the National Cooperative Bank was proposed in 2012, its implementation process was delayed until 2018, when the board of directors of KCBL Bank approved operational and capital collection reforms.

In 2020, the same board approved CRDB Bank’s strategic investment to fulfil the government’s request.

In July 2021, KCBL Bank approved transformation to National Cooperative Bank, and in December of that year, the Tanzania Federation of Cooperative Societies (TFC) supported the establishment of the National Cooperative Bank through KCBL Bank. In 2022, KCBL Bank started receiving members and funds collected by TFC to establish the bank.

Expressing the existing hopes, the Registrar of Cooperative Societies and Chief Executive Officer of the Cooperative Development Commission, Dr Benson Ndiege, said despite the delay in implementing the proposal since it was made in 2012, the implementation pace is currently progressing well.

“Tandahimba Community Bank has already been transformed into Tandahimba Cooperative Bank (TCBL). The beauty of a cooperative bank is that the customer is the owner, making it easier for them to protect it for the benefit of current and future generations,” said Dr Ndiege.