Dar es Salaam. Competition in Tanzania’s banking industry is set to be sharper following the entrance of yet another commercial bank.
The Bank of Tanzania (BoT) has licensed a new entity, United Bank Limited (UBL), that started operations at the end of last month.
Tanzania has over 50 commercial banks but access to financial services remains low.
According to a 2012 Ernst & Young banking review, Tanzania had 47 banks, the highest in East Africa but only 12 per cent of the country’s population is banked.
BoT information says that the bank licence binds it to operate in the country as commercial bank after meeting all the required criteria.
The bank’s headquarters is in Dar es Salaam at Mkwepu/Kaluta Street.
“The Bank of Tanzania wishes to inform the general public that UBL Bank (Tanzania) Limited commenced operations on 31 May, 2013,” notes the BoT information released.
UBL becomes the fifth recently registered banks in Tanzania since 2011. The others are Advans Bank, Amana Bank, First National Bank (FNB) and Njombe Community Bank.
The new entrants to the Tanzania banking arena, excluding UBL, pushed up the total paid-up capital, and increased more opportunity for customers’ choice.
According to Tanzania Banking Survey 2012, the registered four banks in 2011 pushed the paid-up capital by more than Sh57.7 billion.
The new licensed bank, UBL, signifies that Tanzania economy is still open to absorb more financial institutions to meet the demand.
That is because recently even contractors were in push for having their own bank so that they stand to effectively undertake their contracting activities.
That was due to lack of more access to the current banks’ guarantee and bonds to make them carry their activities consistently.
Due to that concern even the positive banking survey in terms of assets and number of banks is yet to meet the demands of customers.
The BoT Financial Stability Report 2010 shows that the financial sector assets have expanded rapidly in the past decade from a total Sh1,637 billion at the end of December 2001 to Sh10,040 billion December 2009.
The growth was led by the private sector deposits in the banking system.