We need Sh22bn to set up co-op bank: federation
The Ushirika Building owned by the Tanzania Federation of Cooperatives in Dar es Salaam. The federation also has its head office in the building. PHOTO|FILE
What you need to know:
The funds - to establish what will be known as Tanzania Cooperative Bank (TCB) - are being mobilised from 37 cooperative unions and other individual members, according to TFC executive secretary, Mr Willigis Mbogoro
Dar es Salaam. Tanzania Federation of Cooperatives (TFC) is seeking a total of Sh22 billion to establish a bank.
The funds - to establish what will be known as Tanzania Cooperative Bank (TCB) - are being mobilised from 37 cooperative unions and other individual members, according to TFC executive secretary, Mr Willigis Mbogoro.
Once established, the bank will work towards empowering cooperative societies through capital injection and other financial woes. It will also seek to bring new life in the collapsed cooperatives.
TCB has already received a temporary registration from the Bank of Tanzania (BoT).
“The liquidity challenge that commercial banks currently face is also affecting our members negatively and this is why we want the bank to be established sooner than later,” he said.
The target is to start with a core capital of Sh22 billion which is more than the Sh15 billion that is required by the regulator of banking operations (the BoT).
“The date for the bank to start its operations will be decided by the board in a meeting that is scheduled to be conducted next month,” he said.
Plans for TFC to establish a bank started during the federation’s general meeting which was held in Dodoma in 2012.
With its head offices in Dar es Salaam, the bank’s board has already been set up and it is currently in the process of hiring the chief executive officer.
The idea to have a Cooperative Bank in the country is not new.
The desire to have a bank that would cater to the needs of cooperatives and rural dwellers emerged as soon as Tanzania attained its independence.
This comes several months after the introduction of Tanzania Agricultural Development Bank (TADB) which is meant to become the apex national-level financial entity that will provide short, medium and long- term credit for development of agriculture.
Besides, the permanent secretary in the Ministry of Industry, Trade and Investment, Dr Adelhelm Meru, announced last month that the government would soon establish an Industrial Bank to speed up investment flow and loans to the manufacturing sector.
In its plans, the TFC seeks to raise the number of cooperatives to 60 by the end of this year from the current 37.
Particular target will be on farmers and pastoralists who face several challenges in their operations.
Next month, TFC will also kick the construction of its Sh2 billion ‘Cooperative Press Manufacturing’ factory which will be manufacturing paper and performing other printing activities and stationery.
