Mwanga Hakika Bank: The fastest—growing commercial bank in Tanzania
Dar es Salaam. Mwanga Hakika Bank has posted remarkable numbers as quarterly statements for the year ended December 31, 2024 were displayed.
The published bank’s financial statement, which is a legal requirement by the Bank of Tanzania (BoT), lifted the lender to becoming among the fastest—growing banks in the country.
In the recent data, the Bank has drastically improved its core performance metrics; from profitability, total assets, customer deposits, loan book, to non-funded and funded income.
The statement shows that the bank’s profit-before-tax surged to Sh 15 billion in 2024 from Sh 10 billion in 2023, which is an increase of 52.67 percent.
The total assets grew impressively to Sh324 billion in 2024 from Sh 208 billion in 2023, which is an increase of 56.60 percent.
The loan portfolio rose to a staggering Sh 200 billion in 2024 from Sh 131 billion in 2023, which is an increase of 52 percent.
Customer deposits also skyrocketed to Sh 217 billion in 2024 from Sh 142 billion in 2023, which is an increase of 53.24 percent. Non-funded income improved to Sh 10 billion in 2024 from Sh 7.2 billion in 2023, which is an increase of 37.3 percent.
While those key performance indicators speak louder, Non-Performing Loans (NPLs), which is another imperative metric for the bank’s growth, were slashed significantly by 50.20 percent, dropping further from 1.74 percent to 0.82 percent.
Speaking with the Citizen Newspaper’s Reporter, Head of Finance and Administration at Mwanga Hakika Bank, Mr Chomete Hussein states that the bank’s upward trend signals acceptability of their products by customers.
“Customer deposits growth that hovers around 53 percent, from Sh 142 billion to Sh 200 billion, is a testament to the customers’ loyalty to our brands,” Mr Hussein clarified.
The total assets growth, according to him, translates into the bank’s stability as the fastest—growing financier for two years consecutively.
“The bank’s strategy implementation under the board’s charge and innovative and quality banking products onboard are top secrets driving this stark performance of the bank,” he shared.
In addition, and as an external factor, the bank’s finance head believes that the sitting Government’s investment and business climate are friendlier to complement these milestones.
The Central Bank’s management of the commercial banks’ operations in the country is viewed as the herald of such stellar performance.
Responding to the declining NPLs, he admits that the bank had to set proper financing models to support loan applicants to help their businesses stay afloat, a calculated move presenting a huge possibility of having the NPLs cushioned.
“When a loan applicant qualifies for the disbursement, and then immediately is exposed to other enormous financial risks such as; economic crisis, natural calamity or redundancy; it becomes difficult for him/her to repay the loan, and hence the NPLs,” he added.
In that regard, the economic stability, job security and people’s ability to achieve their goals have resulted in the reduced NPLs of the bank, sitting within the 5 percent threshold.
He said: “Under financing or over financing attracts the NPLs; and as a bank, we are doing our best to find a way round it.”
The bank is dedicated to continue to bring more efficient and innovative products to cater to the diverse demands of their customer segments.
Opportunities spotted
The Bank has discerned three major business opportunities to their advantage: investing in financial technologies and diving into Small and Medium Enterprise (SMEs) and contractors.
Looking forward, the finance boss said: “We are planning for a greater intervention into technological transformation of the bank, diverting from banking halls (brick and mortar) to digital walls, aiming at changing the transactional experience of the customers.”
For the SMEs, which stimulates the local economy for the largest part, we are busy cooking up banking products to suit their tailored needs. This is the market segment that once was the central shaft of our growth.”
Still and all, contractors are another sliced bread that keeps our appetite alive. They are our long-standing customers whom we want to keep. We will ensure they are supplied with the best out of us,” he substantiated further.
Financial inclusion
The bank envisions a digital expansion to keep pace with the world’s digital shift. However, he optimistically implies that the bank would consider opening new branches, clearing the air that the digital move would not stop any of the predetermined plans.
To cement his statement, he stated that the plans for branch opening will be ready in the first quarter of 2025, with detailed information of the locations of the branches. The bank currently has only seven branches across the country.
“The technical team has locked themselves up somewhere, they are preparing something good for our eyes. When we are ready, we will keep all of you abreast of what is next.”
The Bank’s direction
According to the finance chief, the lender looks to upgrade their Mobile App platform for superlative efficiency. These new features will only help users enjoy improved experience of the platform for transactional purposes.
The Bank continues to make improvements across their portfolio, he said as a reply to what else the bank is doing to grow its business.
Challenges
Mr Hussein clarifies that the year 2024 was a bit a roller coaster; as the liquidity came to terms with the Tanzania banking industry, exorbitantly rising the cost of funds and affecting commercial banks’ profitability margins.
As a solution to the setback, the bank pushed on recruiting new depositors as much as possible—expediting a transition from the cash to the cashless economy.
“Every bank collects deposits; for us it is more of how do you make it easier for customers to do it. We had to invent transactional gateways and payment models to win the hearts of our new customers. By doing so, the liquidity problem was solved.”
The Dollar crisis was another headache for financial markets. The US Dollar was unavailable in the market for the whole period of third quarter of the year 2024,
In that backdrop, the Government of Tanzania acted swiftly by demanding exporters to ensure proceeds from exports are remitted within 90 days after trading to guarantee sufficient stock of Dollars in circulation and reduce pressure on the Shilling.
Mwanga Hakika Bank had to innovate new products such as trade finance to help cash crop exporters and other exporter to remit their earnings through the bank and evade the dollarization of the economy.
Aspiration and message
Tanzanians should expect more innovative and efficient banking products as they always do.
And to their staff, he said that they really appreciate their efforts in making the bank successful and hoping that they will commit the same energy in this fiscal year.
