The banking sector in Tanzania grew rapidly during the 2000s, following reform of the financial services sector. There are 32 registered commercial banks in the country, some of which have branch networks throughout the country; the National Microfinance Bank has 151 branches, National Bank of Commerce has 51 and CRDB Bank has 66 (2012). Many of these commercial banks now offer online banking alongside traditional services. There are 17 registered non-bank financial institutions (2012), including Tanzania Investment Bank, Tanzania Mortgage Refinancing Company (TMRC) and Tanzania Postal Bank, along with several community banks based around the country. In addition to these services there were over 200 foreign exchange bureaus operating in 2011.
The Bank of Tanzania, the country’s central bank, supervises the banking system under the Banking and Financial Institutions Act (2006), which replaced the earlier Banking and Financial Institutions Act of 1991. Banks are reviewed annually with regard to their risk management framework focusing on liquidity, interest rate, credit, foreign exchange and operational risks. According to the World Economic Forum’s Global Competitiveness Report (2012- 2013), Tanzania is in the bottom third of countries assessed in terms of the soundness of its banks.
The World Bank’s Ease of Doing Business Index (2011) ranks Tanzania 14th out of 46 sub-Saharan African countries in overall ease of doing business. The country comes in a strong 12th position in terms of getting credit. Tanzania performs similarly when it comes to protecting investors, ranking in 16th position within the region. According to the World Economic Forum’s Global Competitiveness Report (2012-13), availability of financial services in Tanzania is similar to other sub-Saharan countries, achieving a score of 3.9 (out of a possible 7). Although in terms of the world mean there is scope for improvement. Of adults aged 15 and over in Tanzania, 17% hold an account with a formal financial institution. With regard to ease of access to loans, there is also an opportunity to improve the service with Tanzania’s score falling short of the world mean. Borrowing or lending behaviour in the country is shown by the World Bank’s report, with just 7% of adults aged 15 and over having taken out a loan from a financial institution in the last year (2011).
