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Tanzania’s CRDB Bank plans to boost its retail business

Published

4 months ago

May 27, 2024

To spur the expansion of its retail business, which is predicted to be the next frontier for commercial banks in Africa in terms of income generation, Tanzania’s CRDB Bank has announced a new template for its branch operations.

The proposal, which is detailed in the annual report (2023), divides the branch network of Tanzania’s biggest lender by assets into two specialized divisions: Branch Sales and Business Performance and Branch Operations and Controls.

“In our relentless pursuit of customer satisfaction and operational excellence, we thoroughly reviewed 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.”

The lender is exploring several initiatives, including the branch reorganization, to support the expansion of its consumer business and attract new clients. Additional initiatives include expanding agency networks, digitizing financial transactions, and adding new branches.

Throughout the year, the listed Dar es Salaam Stock Exchange (DSE) added fifteen new branches nationwide and launched digitalized account opening platforms, such as self-account opening using the SimBanking app and CRDB Wakala.

As a result, the bank opened more than a million new accounts with customers and mobilized deposits totalling more than Tsh500 billion ($192.25 million).

“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.

A new agency banking system, which CRDB also unveiled, aims to enable agents to carry out hitherto unattainable tasks including reversals and real-time income tracking. Furthermore, allowing agents to do business using cell phones sped up the onboarding process for both new customers and agents.

Through these efforts, the bank’s retail deposits increased from Tsh3.6 trillion ($1.38 billion) in 2022 to Tsh5.1 trillion ($1.96 billion) in 2023, a 41% increase.

At the same time, the number of new accounts established increased from 878,780 to 1.25 million, a 43% increase. In December 2023, the retail loan book increased by 20% to Tsh4.1 trillion ($1.57 billion).

“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 consulting firm McKinsey & Company projected in 2018 that the fastest-growing segment, the mass market, would represent the next frontier for bank expansion in Africa, accounting for 70% of banks’ retail business revenues by 2025.

For banks with significant operations throughout the area, including as Kenya’s Equity, KCB, NCBA, and Co-operative, the retail banking model has increased their non-funded incomes. The “high volume, low margin” businesses that the model centres around are aimed at the lower-income

Related Topics:Featured Tanzania Tanzania's CRDB Bank

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VenturesNow

Zambia eyes recovery following worst drought

Published

8 hours ago

September 28, 2024

Ifeoluwa Dada

As it emerges from its worst drought in living memory, Zambia hopes to achieve a fast recovery in economic growth and a halving of its budget deficit in the following year, the country’s finance minister announced on Friday.

In contrast to a projected 2.3% growth in 2024, the copper producer aims for 6.6% growth in 2025, according to Finance Minister, Situmbeko Musokotwane, in a budget speech.

The El Nino-caused drought destroyed Southern Africa’s crops, resulting in food shortages and harming the region’s economic prospects this year.

Zambia’s finance minister said on Friday that the nation, which is coming out of the worst drought in living memory, intends to quickly recover economic growth and cut its budget deficit in half the next year.

Finance Minister Situmbeko Musokotwane stated in a budget address that the copper producer is targeting 6.6% growth in 2025 as opposed to a projected 2.3% increase in 2024.

A UNICEF study in March 2024 states that the majority of the country’s central and southern regions have been impacted by the dry spell since mid-January. These regions have gotten less rainfall than usual, which has resulted in the destruction of one million hectares of maize—nearly half of all the corn grown in the nation.

Since hydropower generates more than 80% of Zambia’s electricity, the analysis also predicted that the drought would cause a power shortage of 430 megawatts and have an impact on surface and groundwater levels. These projections would have serious ramifications for industries other than agriculture.

The minister further stated that following the conclusion of a Eurobond restructuring exercise, Zambia was still negotiating restructuring arrangements with certain commercial creditors.

He reported that the China Development Bank and the Industrial and Commercial Bank of China have just struck provisional restructuring agreements with Zambia.

It has been demonstrated that the agreements are in line with Zambia’s IMF program and the “Comparability of Treatment principle,” which aims to prevent the wealthier creditor nations that make up the Paris Club from making disproportionate concessions in comparison to other creditors.

The lengthy debt restructuring process in Zambia has hurt local financial markets and discouraged investment.

VenturesNow

Ghana central bank cuts key rate as inflation cools

Published

21 hours ago

September 27, 2024

Ifeoluwa Dada

The governor of Ghana’s central bank has stated that the country’s economy is still recovering strongly and that inflation is continuing to decline, causing the bank to drop its main interest rate by 200 basis points to 27%. This was the first rate cut since January.

At a press conference Friday, Bank of Ghana Governor Ernest Addison stated that economic indicators point to a proceeding disinflation, with price increases continuing to moderate in the direction of the year’s short-term range target of 13% to 17%.

“Such a strong signalling of the monetary policy rate by reducing it by 200 basis points tells you that the central bank is quite satisfied with the progress of recovery of this economy,” Addison said, adding that all indicators including growth, inflation and fiscal policy are improving.

According to Reuters polled economists in July, Ghana’s interest rate is predicted to drop by 200 basis points by year’s end.

“This easing of policy is understandable, given that the recent falls in inflation had caused real interest rates to rise, something that this cut will partially reverse,” said Leslie Dwinght-Mensah, economist and research fellow at Accra-based Institute for Fiscal Studies.

“The strong rate of economic activity, which official data recently revealed, also gave the central bank the comfort to take this step.”

Economists surveyed by Reuters in July expected that by year’s end, Ghana’s interest rate will have decreased by 200 basis points.

“The strong rate of economic activity, which official data recently revealed, also gave the central bank the comfort to take this step.”

Economists surveyed by Reuters in July expected that by year’s end, Ghana’s interest rate will have decreased by 200 basis points.

“The strong rate of economic activity, which official data recently revealed, also gave the central bank the comfort to take this step.”

Following the completion of preliminary debt restructuring negotiations with two bondholder groups, Ghana extended an invitation to holders of its approximately $13 billion worth of international bonds to exchange their holdings for new instruments.

Bondholders can accept the offer until September 30.