AfricaPress-Tanzania: CRDB Bank has injected 7.0bn/- into Kilimanjaro Cooperative Bank (KCBL), which was on a verge of collapsing. CRDB Bank’s boost to KCBL gives a new ray of hope after being asked to turn around the institution by the Bank of Tanzania (BoT).
Deputy Minister for Finance and Planning, Dr Ashatu Kijaji, said CRDB Bank’s initiative to revive KCBL gave new hope to cooperatives in the country, which were major stakeholders of the bank.
“This decision of CRDB Bank to invest in KCBL (for some) we see as the creation of a largest cooperative bank in the near future…The capital injection will turn around KCBL to become more competitive in the market and bring about productive cooperative societies and Tanzanians in general,” said Minister Kijaji.
The deputy minister said this during the launch of KCBL services at the bank’s headquarters in Kilimanjaro. The ceremony to revive bank services was also attended by various government officials, including Kilimanjaro Regional Commissioner, Dr Anna Mghwira, and BoT Deputy Governor, Financial Stability and Deepening, Dr Bernard Kibesse.
The deputy governor said a number of banks had hesitated to recapitalise on KCBL based on its line of business, but CRDB Bank had decided to inject the capital since the latter understood cooperatives’ businesses.
“Despite CRDB Bank investment in KCBL, it does not make KCBL its property, but the bank will remain cooperative per its establishment commitment,” Dr Kibesse said.
CRDB Bank capital injection of 7.0bn/- centred on boosting liquidity of KCBL, which went through a difficult financial period due to the mismanagement of some of its executives and led the bank to suspend operations. Along with the capital, CRDB Bank will provide human resources to oversee KCBL operations.
CRDB Bank will provide four executives in the positions of general manager, head of finance and operations, head of credit and business development and head of internal audit as well as two members of the board.
CRDB Bank Acting CEO and Chief Financial Officer, Fredrick Nshekanabo asked KCBL clients and all stakeholders to restore trust in the bank as they were going to put it back on the map through capital investment as well as human resources.
The acting director said they believed their experience in corporate affairs due to its origins in cooperation would be a catalyst for reviving the bank.
CRDB Bank also has revived Tandahimba Community Bank (Tacoba) and now the bank is making profit. CRDB Bank is the leading bank with over 6.0tri/- assets and 5.4tri/- deposits and is listed on the Dar es Salaam Stock Exchange (DSE).
