Saturday, December 9, 2017

TWB Bank to be restructured under President’s directives

President John Magufuli has censured the Tanzania Women Bank’s (TWB) poor performance and ordered restructuring of the bank to make it more competitive. The president said that the bank should be reformed because it has failed to perform and meet its objective of addressing challenges faced by women in accessing loans at reasonable interest rates. Speaking in Dodoma yesterday during the inauguration of the 9th Chama Cha Mapinduzi Women’s Wing General Assembly, President Magufuli said that the bank has recorded poor performance since its establishment, with men being the major borrowers. “TWB’s performance is very poor, and men are the main borrowers, while women are charged higher interest rates ... it is useless to have a women bank which exploits them,” he said. The president said there was need for transforming the bank to compete in the current market, noting that its coverage is also confined in Dar es Salaam. He noted that under the new arrangements, any bank which will fail to perform will be closed down because the government will not support such institutions which are causing loss of revenue which could be used in other sectors such as health, agriculture and education. The president urged the new women leaders who will be elected to assist the party in restructuring the bank so that it can go with the objective for its establishment. “This bank has never helped women, instead it has been exploiting them despite bearing the women logo,” he said. The government owned bank was created in 2007 and registered as a limited liability company with a shareholding structure comprising of 97 per cent government and 3 per cent private individuals and entities. It officially started operation in 2009, with a passion and commitment towards empowering women economically and socially. TWB was spotted as one of the banks likely to fall victim of becoming under receivership after failing to meet regulatory standards, including having a capital adequacy ratio of 5bn/. Last year, BoT took over operations of Twiga Bancorp following directives by President Magufuli to the central bank to take action against failing banks which are owned by the government. A report issued by the Controller and Auditor General (CAG) Prof Mussa Assadin Dodoma in April this year showed that the bank (TWB) was falling into a serious financial crisis and “the central bank should intervene before it’s fully bankrupt.” The apex auditor explained that the capital ratio for the bank was below 5bn/- as required by the Banking and Financial Institution Act, 1991. In a report tabled to the parliament, the CAG found the bank has during the financial year ending June 2016 released loan amounting to 655m/- without adhering to best practices, including proof of companies loaned. “The bank did not pay attention to identity or obtaining collaterals from loan applicants ... This bank was indeed supposed to be closed,” he said. The CAG however urged the Bank of Tanzania (BoT) to track the performance of the bank which has shown all signs it would become bankrupt. He said the continuation of the undercapitalized institution poses a risk to financial institutions.

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