Prime Minister Majaliwa warns over fraud in banking sector

Monday June 24 2019


By The Citizen Reporter @TheCitizenTZ

Dodoma. The government has said that it would not tolerate a tendency of some unscrupulous businesspeople who prepare two sets of financial statements for the purpose of defrauding commercial banks.

“We have information that some traders prepare two sets of financial statements. When applying for a loan, they present one showing a better financial flow to the bank and the other – which shows a poor financial flow to TRA [Tanzania Revenue Authority],” the Prime Minister Kassim Majaliwa, said here on Monday June 24, 2019.

He was speaking during an event to launch a branch for TIB Corporate Bank Limited (TIB-CBL) here yesterday.

“If we get you, we will use the one that you submitted to the bank and charge you more in taxes,” he warned.

Present at the event was former Prime Minister, Mr Mizengo Pinda, deputy Finance and Planning minister, Dr Ashatu Kijaji, deputy Minister for Land, Housing and Human Settlements Development, Ms Angelina Mabula and representatives from the Bank of Tanzania (BoT) and several public and private institutions that have benefitted from TIB-CBL’s loans during the past year among others.

BoT data show that commercial banks held Sh31.1 trillion in total assets as of April 2019. However, the level of Non-Perming Loans (NPLs) was high at 11.1 per cent of total gross loans.


The BoT recommends that the highest level of NPLs to total gross loans should not exceed five per cent.

Mr Majaliwa said commercial banks have every reason to lower their interest, considering the fact that the BoT has lowered both the costs of loans and interest rates on government securities.

Besides, said Mr Majaliwa, the country’s inflation rate was low.

Until 2017, a FinScope Survey showed that 65 per cent of Tanzanians had access to financial services. The number was largely fueled by mobile money services while it was only 16 per cent of the population that had access to banking services.

According to Mr Majaliwa, this was an indication that commercial banks needed to foster their efforts and employ use of agents and alternatives channels to reach the unbanked population of the segment. 

According to Dr Kijaji, TIB-CBL’s NPLs stood at 5.43 per cent of its total gross loans. “This is an indication that the bank is on the right footing to meet the BoT’s recommended rate,” she said.

A subsidiary of the government-owned TIB Development Bank Group, TIB-CBL was formed in 2015. TIB Development Bank, TIB-CBL and TIB Rasilimali Limited.

According to the TIB-CBL managing director, Mr Frank Nyabundege, the bank has undergone several improvements during the past four years, with its operating capital growing from Sh206 billion in 2015 to Sh409 billion as of December 2018.

Similarly, customers’ deposits with the bank rose from Sh110 billion in 2015 to Sh338 billion in December last year.