Exim Bank reveals its lending modalities

Dar es Salaam. Exim Bank-Tanzania projects to increase its exposure in lending to Trade by 30 per cent beginning in year-2018. This is in an effort to support the government in its industrialization agenda that aims to make Tanzania a semi-industrialized, middle-income economy by 2025.

As it is, the bank has recently been experiencing a fall in lending to the real estate sub-sector. Apparently, this is being contributed to by the ongoing slump in real estate, especially in the rental business.

According to the bank’s head of credit, Mr Sandeep Sinha, Exim Bank’s credit portfolio to Trading is one of the biggest segments, standing at 20-to-25 per cent of total credit.

Mr Sinha revealed this to The Citizen over the weekend shortly after the bank’s three branches – namely Namanga, Clock Tower and Exim’s Tower – were awarded the ISO 9001:2015 Certification in quality standards.

“In general, we will focus more on trading and wholesale. Some customers in this segment operate large supermarkets and chain stores and, as such, have the potential to use a number of the bank’s conventional, as well as trade, products – thus making it easy to recover the loan on time and in full,” Mr Sinha stated.

He further said that Exim Bank-Tanzania will continue lending to Manufacturing and Tourism, since advancing credit to such ‘growth’ sectors of the Economy “is easy to manage the cash flows… thus posing little or no risk”

Noting that much of Tanzania’s earnings in foreign currency comes in through Tourism, Mr Sinha revealed that some 18-to-20 per cent of the bank’s lending goes to tour operators.

He said the bank also plans to focus on other significant economic sectors in order to support the Tanzania government’s efforts at transforming the country into a semi-industrialized economy by year-2025.

The head of credit also revealed that Exim Bank has not really faced that many challenges in lending. However, but they see a growing risk in lending to real estate – especially with regard to commercial properties.

For his part, the bank’s senior manager (Credit), Mr. Edwin Urasa, said most banks avoid risks by preferably lending to the government – which is generally considered less risky – or resort to inter-bank lending involving other banks as a matter of course.