Banks advised to venture into rural areas

MARC NKWAME in Arusha

BANKS, credit organisations and social security funds should venture into rural areas to train and enrol the more than 75 per cent of Tanzanians into mainstream financial services and covers, the Minister for Finance and Planning, Dr Phillip Mpango, has said.

Dr Mpango said here yesterday that by mainly being limited to the urban population, they might not be aware of what they miss on account of large untapped potential driven by the very low penetration in rural market.

“More than 80 per cent of the nearly 50 million Tanzanians, reside in rural areas and these depend on agriculture.

They need to be sensitised to join the official financial stream in order to ensure this backbone of the economy flow, he said when opening the 18th Bank of Tanzania (BoT)’s (two-day conference of financial institutions taking place at the Arusha International Conference Centre (AICC).

BoT Governor, Prof Benno Ndulu, reminded the heads of banks and financial institutions that, unless they make their loans farmers friendly, through checking their interest rates, it will be difficult to bring rural residents under their wings.

Attended by over 300 participants, the Conference of Financial Institutions is being held in the wake of recent report from BoT indicating that commercial banks’ credit to the private sector has just climbed up by 1.7 trillion/- as of September 2016.

Around this time last year, an increase of 2.9 trillion/- credit to private sector was recorded by the Central Bank in September 2015.

BoT report on the rate of credit growth to agriculture sector which employs the highest number of Tanzanians in addition to driving the economy for the rural precincts, sees a drop to -8.7 per cent from 15.4 per cent that was recorded last year.

BoT Conference of Financial Institutions is a platform established in 1980 on which experts in financial services exchange views and experience on issues pertaining to the financial sector and the economy in general.

The Arusha Conference has brought together heads of financial institutions and other stakeholders and is running under the theme of ‘Harnessing Tanzania’s Geographical Advantage: The Role of the Financial Sector.’

BoT and heads of financial institutions are addressing eight topics including the challenges of Industrialisation in Tanzania and the pursuit of a manufacturing-based export- Led growth in the country.

Other issues that will be deliberated here include; Financial Development in Tanzania against the Challenges for Industrial Development and Job Creation; The Challenges of Industrialisation in Tanzania: A Comparative Perspective and the on Leveraging Transit Trade for Tanzania.

The Conference is also covering the topic of Accelerating Corridor Development for Rapid Economic Growth; Extending Tanzania’s Financial Frontiers: The Role of Technology and Extending Tanzania’s Financial Frontiers: Experience, Lessons and Way Forward.