TANDAHIMBA BANK SEEN ON RECOVERY PATH "Credit News 24"
CRDB supported the community bank to walk out of financial difficulties after it incurred losses which reached 200m/- last year. The bank's non-performing loans ratio reached 90 per cent as rate of default on loan repayment soared to unprecedented levels.
The community bank poor balance sheet left the regulator, the Central Bank to either shut it down or finding a custodian bank. CRDB Managing Director Dr Charles Kimei said at the Annual General Meeting in Arusha over the weekend that the Central Bank had asked them to rescue the bank from bankruptcy last year.
"The bank is on recovery path now. Soon we will be letting go of Tandahimba bank as it can stand on its own feet again," said Dr Kimei. TCB Chairman Rajabu Mmunda said the bank was established in 2008 but by 2015 they were doing badly and BoT asked CRDB to handle them until stabilizing their balance sheet.
"Thanks for CRDB experience, we managed to reduce our losses and in this year's quarter one we broke even. "We were making losses every year and failed to make profit but since the new management came in at last we are seeing positive changes," Mr Mmunda told the AGM.
TCB General Manager Mugwagi Steven said they had incurred a loss of 200m/- up last November but up to end of March they registered no losses. "We have posted a little profit and our NPLs have declined from 90 per cent to 14 per cent last December and now in quarter one came down to 6.0 per cent," Mr Mugwagi later told the ‘Daily News.’
He said that they are targeting to lower further their NPLs to less that the sector benchmark of 5.0 per cent in this year. TCB said still they have challenges to tackle but the future ahead was bright. The bank mainly lend cashew nut farmers who borrow between 2.0m/- and 10m/- to look for their farms.
In 2016, agriculture lending was 27 per cent of their total loan portfolio and repayment rate stands at 95 per cent after CRDB chipped in. TCB policy wants the bank to lend at least 66 per cent to agriculture. Mr Mugwagi said last year they lent out some 177m/- to cashew farmers but this year they have planned to dish out 400m/-.
Dailynews
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