Traders scout for Sh5 billion capital to establish own bank

Tanzania Business Community chairman Johnson Minja speaks at a past event. PHOTO | FILE 

By Veneranda Sumila The Citizen Reporter

In Summary

Tanzania Business Community chairman Johnson Minja told The Citizen earlier this
week that traders are currently pooling resources so they can realise their dream


 MORE INFO: TANZANIA BUSINESS COMMUNITY
The Tanzania Business Community brings together hundreds of traders from various urban centres that are out to defend their right in issues pertaining to taxation and the business climate in general. It is on record as having worked tirelessly to oppose the existing tax regime for traders and especially how the use of Electronic Fiscal Devices impact on their business undertakings.

Dar es Salaam. Tanzanian traders are planning to establish their own bank in a move meant to help businesspeople get easy access to loans.

They are looking for a Sh5 billion seed capital so they can start a financial institution which will gradually turn into a commercial bank.

The Tanzania Business Community chairman, Johnson Minja, told The Citizen earlier this week that traders are currently mobilising their resources together so they can realise their dream.

Lack of capital has been the biggest challenge afflicting local businesses from involving in big investment.

The key investment lender –TIB Development Bank - has been unable to meet the traders’ needs as it is operating under a deficit of more than 150 per cent.

TIB Development Bank currently has a capital base of $300 million against a demand of $2 billion.

With such limited funds TIB is unable to finance and meet the needs of the private sector which needs a lot of cash to invest in big development projects.

According to Mr Minja, members of the business community are planning to meet early July and discuss on how local businesses will be empowered to smoothly do business.

“We have very good businesspeople with very good business ideas but the problem is that they lack capital. Since the government has failed to provide a solution to this problem, we are planning to look into better ways that can see us financing ourselves,” said Mr Minja.

Tanzania is leading other East African countries in Foreign Direct Investment (FDI) with latest data showing that the country attracted FDI totalling $ $2.142 billion in 2014, up from $2.131 billion in 2013. While this is happening, local investors do not have what it takes for them to invest in large projects.

“To invest in big projects requires one to have a lot of money and this can only be possible when there is financial support from financial institutions. However, this is not happening in Tanzania as the available financial institutions only enable us to access loans for small businesses which we repay in a very short time,” the Tanzania Private Sector Foundation executive director Mr Godfrey Simbeye said in an interview.

He said that even if foreign investors demand only $20 million (Sh32 billion) for partnership “I am telling you there is no financial institution that can offer such a loan.”