TPB Bank outlines measures to reduce non-performing loans

Dar es Salaam. TPB Bank has outlined measures to reduce and even end non-performing loans (NPLs) which was estimated at six per cent last year.
NPLs were one of the biggest challenges in Tanzania’s banking industry averaging at 12.5 per cent of the gross loans in 2017.
The measures include, among others, targeting low risk borrowers, close monitoring and cooperation with the National Board of Accountants and Auditors (NBAA) in helping Small and Medium Enterprises (SMEs) in preparing accounts, according to the bank’s board chairman Dr Edmund Mndolwa.
He made the commitment on Thursday (June 7) during the bank’s 26th annual general meeting which brought together shareholders to discuss the achievements, opportunities and challenges that the sector was grappling with.
The bank’s profit before tax jumped to Sh18.4 billion last year from the previous year’s Sh15.6 billion.
“We are now strict and selective in issuing loans. We give more priorities to groups because it is easier to make follow-up on them,” said Dr Mndolwa as he responded to a question posed by The Citizen on the measures the bank was taking to address the challenge of NPLs.
He also said in collaboration with NBAA they would ensure borrowers, SMEs, in particular had to keep records of their businesses.
“Majority of SMEs don’t keep records. This is a big challenge indeed,” Dr Mndolwa said, calling on them to use Electronic Fiscal Devices (EFDs).
TPB Bank corporate affairs chief manager Noves Moses told The Citizen that they were not abandoning the sectors which were considered to be ‘risky’ but what they do is to provide them with education and be keen, before issuing loans.
She cited agriculture as the sectors which require close supervision as many farmers had little skills. The sector also depends much on weather.
“To reduce and even to completely end NPLs, we have become very smart in issuing loans as well as collecting debts,” noted Ms Moses.
Last year, TPB Bank, which has a total of 80 branches countrywide, recorded a nine per cent increase in loans to Sh325 billion.
TPB Bank maintained its brand after it was merged with Twiga Bancorp which was under the central bank supervision since 2016.