Tanzania's CRDB Bank plans to boost its retail business

CRDB Bank having an open day in Dar es salaam, Tanzania. PHOTO | CRDBBy JAMES ANYANZWA

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Tanzania’s CRDB Bank has restructured the operations of its branches in a push to

boost the growth of its retail business tipped to be the new frontier for revenue generation by commercial banks in Africa.

Under the plan, which is disclosed in the annual report (2023), Tanzania’s largest lender by assets has split its branch network into two specialised units: Branch Operations and Controls, and Branch Sales and Business Performance.

“In our relentless pursuit of customer satisfaction and operational excellence, we conducted a thorough review of our organisational structure. This revamp was designed to align more closely with the needs of our valued customers while driving performance to new heights,” the lender says.“This strategic realignment ensures a sharper focus on customer-centricity and positions us to capitalise on growth opportunities with greater agility and efficiency.”

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The branch reorganisation is part of a series of initiatives that the lender is pursuing to bolster the growth of its consumer business and acquire more customers.

Others include opening of new branches, digitalisation of banking transactions and expansion of agency networks.

The Dar es Salaam Stock Exchange (DSE)-listed lender opened 15 new branches across the country during the year and rolled out digitalised platforms for account opening including self-account opening via SimBanking app and CRDB Wakala.

This resulted in the bank acquiring over one million new customer accounts and mobilising more than Tsh500 billion ($192.25 million) in deposits in the process.

“This bold initiative (account opening) not only extended our presence to previously untouched areas but also transformed mobile branches into enduring hubs of service and support. From the serene landscapes of Turiani to the bustling streets of Mafia, each new branch represents a beacon of opportunity and empowerment,” the lender says.

CRDB also introduced a new agency banking system, which seeks to empower agents to perform previously unavailable transactions, including reversals and real-time income tracking.

Additionally, enabling agents to use smartphones for transactions expedited onboarding of new agents and customers.

These initiatives lifted the bank’s retail deposits by 41 percent to Tsh5.1 trillion ($1.96 billion) in 2023, from Tsh3.6 trillion ($1.38 billion) in 2022 while the number of accounts opened soared by 43 percent to 1.25 million from 878,780 in the same period.

The retail loan book grew by 20 percent to Tsh4.1 trillion ($1.57 billion) in December 2023.

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“The 2023 financial year marked a remarkable success for our retail business, with significant achievements in key indicators across various segments, including retail deposits, loans and advances to customers. A key driver of this success was the streamlining of customer onboarding, which resulted in the growth of total retail banking income,” the lender added.

Global consultancy firm McKinsey & Company predicted in 2018 that the mass market — the fastest-growing segment — would be the next growth frontier for banks in Africa, with 70 per cent of banks’ retail business revenues coming from the mass market and the middle-income customers by 2025.

The retail banking model has boosted the non-funded incomes for the likes of Kenya’s Equity, KCB, NCBA and Co-operative, which also have extensive operations in the region. The model revolves around ‘high volume, low margin’ operations targeting the low-income segment of the population.