Tanzania: CRDB microfinance profit soars

CRDB Bank’s Microfinance Service Company has posted a pretax profit increase 41 per cent to 8.58bn/-, thanks to overall growth of business activities.

The bank’s unit, which will soon turn to full-fledged microfinance bank, posted 8.58bn/- against 6.13bn/- of 2014. 

The unit profitability was mainly due to a growth in insurance commission, interest income on term loans and non-interest income generated last year.

The loan portfolio, according to a statement issued during the bank’s investors forum, increased by 39 per cent to 221bn/- in 2015 from 158bn/- in 2014. 

The loan went up as the deposits mobilised from partner microfinance institutions (MFIs) increased by 81 per cent to 123bn/- from 68bn/- in 2014.

“This (deposits) is attributed to the increase in the number of partners’ institutions, their members and the mini-service centers’ operations,” the report showed.

A decline in the number of MFIs from 469 in 2014 to 441 could not derail the saving mobilisation. The bank said the drop was due to non-compliance. Total assets of the microfinance unit grew to 24.19bn/- from 17.53bn/-.

The profit was also pushed up by fees and commissions income that increased 39 per cent to 21.94bn/- in 2015 from 15.85bn/- in 2014. 

The operating cost went up by 43 per cent to 13.93bn/- last year compared with 9.8bn/- of previous year, caused by growth in the number of staff and implementation of a new business expansion initiative through mini-service centres.

The bank was in final preparation of turning the unit into a microfinance bank, where if everything goes as planned it will start operation this July. 

The bank said the subsidiary would be turned into a full fledged microfinance bank after showing signs of becoming stand alone bank.

The microfinance subsidiary has 75 service outlets across the country, which is enough to act as branches to support the establishment of the bank.
Source: Daily News, reported from Dar es Salaam, Tanzania
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