TANZANIA: CRDB Bank, one of the largest lenders in the country, has launched a formal request to the government to buy additional shares of the proposed national cooperative bank.
The bank has already purchased a 20 per cent stake in the national cooperative bank and said that they have the financial muscles and the technical know-how to run cooperative operations in the banking sector.
However, recent government data shows that almost 80 per cent of the cooperative bank has already been bought to raise 16.8bn/- seed capital.
The CRDB Group Chairman, Dr Ally Laay, represented the formal request to the Parliamentary Standing Committee on Industry, Commerce, Agriculture and Livestock Chairperson Mariamu Mzuzuri (MP) who led members of the committee to get firsthand information on the development of plans to launch the national cooperative bank.
“Everything is going well to pave the way, financially, for the establishment of the cooperative bank,” Dr Laay told the committee over the weekend.
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The cooperative bank is slated to start operation in less than two months and will be launched by President Samia Suluhu Hassan.
The CRDB 20 per cent stake in the cooperative bank came through its capital investment to rescue the former Kilimanjaro Cooperative Bank and Tandahimba Community Bank (Tacoba) of 7.0bn/- plus additional funds. The two banks have since changed their names to KCBL and Tacoba respectively and their mode picked on establishing the national cooperative lender.
“The investment (in KCBL and Tacoba) was given not as a loan but as part of the ownership. These shares plus additional funds will be included in the purchase of a national cooperative bank stake of 20 per cent,” Dr Laay said.
He pledged for the stakeholders to support CRDB which now has two subsidiaries in Burundi and the Democratic Republic of the Congo (DRC) and plans to extend further its overseas operations. Regarding CRDB’s request, the committee chair Ms Mzuzuri said the lender’s effort to revive the two banks and the arguments put forward validate the request and are discussable.
“We will see how to respond to your (CRDB) request since it is can be discussed,” Ms Mzuzuri told her CRDB counterpart. KCBL General Manager Godfrey Ng’urah said the national coop bank aims to increase alternative means of income for the cooperatives and provide financial products that meet the needs of cooperative members.
“There are long-term goals that include increasing the capital of the cooperative bank to 100bn/- shillings. “Plus, KCBL leads in negotiation with foreign banks like Rabo Bank, IFC AfDB and Coop Bank of Kenya to invest in our cooperative bank,” said Mr Ng’urah.
The bank has also said that it intends to sell some shares on the Dar es Salaam Stock Exchange (DSE) to raise extra capital. Last week, the Prime Minister said 78.5 per cent of the national coop bank was purchased to raise 15.7bn/. The amount collected is well above the regulatory capital benchmark of 15bn/-.
CRDB is a former cooperative bank but changed its modus operandi to a commercial bank over two decades ago.
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