A round of applause rings after President Jakaya Mrisho Kikwete has officially launched the First National Bank Tanzania (FNB-Tanzania) yesterday at the Kilimanjaro Grand Hyatt hotel in Dar es salaam. Others from left are the High Commissioner of South Africa to Tanzania, Mr Thanduyise Henry Chiliza, the CEO of FirstRand, Mr Sizwe Nxasana and the Deputy Permanent Secretary in the Ministry of Finance Ms Elizabeth Nyambibo.Photo by State House

President Jakaya Kikwete has underscored the need for banks and financial institutions to come up with designated loan products for potential agricultural investors in order to push the entire economy to a higher trajectory of growth.

“Tanzania is well endowed with raw materials from agriculture, mining and natural resources that can support growth of vibrant manufacturing sector, but it has remained exporter of primary products…this must change”, said President Kikwete when launching First National Bank Tanzania Limited (FNB) in Dar es Salaam yesterday.

He said apart from agriculture the banks should also consider providing loans to other players in the productive sector and manufacturing in particular. He said once farmers are well empowered financially the agriculture sector will blossom in a manner that will see the country’s economy growing while people’s incomes will increase and expanding banks in return.

Kikwete said changes in the agricultural and manufacturing sector are likely to be facilitated by the financial sector availing credit to potential investors. He added that if finance is readily available to entrepreneurs, Tanzania can quickly become an industrial hub of great repute.

“I appeal to banks to do the needful, I know you are doing it but you could do more,” he noted.

According to him, the banking sector plays an important role in accelerating economic growth and poverty reduction, hence pushing the government to make it a priority agenda in the recent economic reforms.

Kikwete said that plans are underway for the second generation of financial sector reform programme that will enable establishment of a Credit Reference Bureau to scrutinise customers and assist lenders to accurately asses the risk of lending money.

He however, assured investors in the banking sector that the government through the Bank of Tanzania will continue to ensure presence of environment conducive for banks to operate in.

The president said that financial institutions are yet to fully utilise legal instruments that enables people and companies to get housing loans. He mentioned the legal instruments in place as Mortgage Finance Act No. 17 of 2008 and Financial Leasing Act No 5 of 2008.

“We are doing everything to reduce the cost of doing business in Tanzania. We are making progress although there are some tough challenges which we are determined to overcome,” he said.

For his part, Chief Executive Officer, FNB Tanzania, Richard Hudson said that FNB has performed well since its establishment, saying the bank was planning further expansion in the country.

“FNB has launched a range of products into the Southern African and African markets over the past few years. We are intending to do the same in Tanzania”, he said.

He said there are several reasons that pushed FNB to invest in Tanzania such as a large population, strong economic growth, a sizeable GDP, regulated banking industry and stable political environment.

Hudson promised to collaborate with Tanzanians in making a positive contribution to the economy.

The launching of FNB has brought the number of banks operating in the country to 47.

BY FELISTER PETER, Reuters

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