Dar es Salaam. Shariah-compliant Amana Bank is aimed at expanding its footprint.
It has announced a plan to scale up microlending.
Targeted are groups of five to ten people with viable business ideas. This is part of increasing financial inclusion for Tanzania. The bank’s managing director, Dr Muhsin Masoud, said the loans would range from Sh300,000 to Sh4 million. They would be offered in term of products or services instead of cash.
“We have been serving the formal sector or registered businesses for so long but as we celebrate seven years of our establishment, we want to facilitate informal and small-scale businesses to make them grow.” He said applicants for group loans must be of more than 18 years of age, with valid identity cards as well as viable business ideas.
Dr Masoud said applicants would also be required to have letters of recommendation from local authorities in the places where applicants live.
“No collateral is needed because guarantorship will come from group members,” he said.
For the beginning, the loan will cover Dar es Salaam and Tanga regions only.
According to Dr Masoud, the bank has so far, offered at least Sh143 billion as loans.
Its deposits now reach Sh192 billion and it targets to get Sh200 billion in 2019.
Amana Bank was established in 2011 in Tanzania with a single branch, but on November 24 it will celebrate its seven years of operations with eight branches in Dar es Salaam, Mwanza, Arusha and Tanga.
Islamic banking is a system of banking that follows Islamic principles and guidelines.
Majority of Muslims prefer this form of banking because it complies with the fundamental principles of Islamic law, Shariah