More Tanzanians develop culture of saving

A banking expert has claimed that stiff competition in the banking sector has led to an increased culture of saving among Tanzanians compared with the past when the sector was under state control.

Speaking to this paper in an interview in Dar es Salaam yesterday, Standard Chartered Bank director of consumer banking Ralph Watungwa said many Tanzanians had now realized the importance of saving their surplus wealth as cash in their bank accounts.

Watungwa, who spoke shortly after he had launched the second round of the bank`s deposit-and-win campaign dubbed `Live it Up`, said now there were a lot of banks and financial institutions which offered various products while fifteen years ago there were hardly five banks in existence.

The financial industry in the country was growing at a reasonable rate and the culture of saving among Tanzanians had also grown, he said, urging banks to offer more affordable services to their customers.

Watungwa said due to stiff competition, banks and other financial institutions had been engaged in finding ways to lure customers of various categories including small savers.

Some of the strategies being undertaken by financial institutions to lure customers included the introduction of raffles, reduction in interest rates on small loans, inventing more deposit brands as well as an increased range of loan categories.

Explaining the objective of the campaign, Watungwa said it was launched to increase a saving culture among Tanzanians with a view to increasing the bank`s deposits and customers.

During the campaign, which ends in September, this year , winners would receive various prizes including top of the range mobile phones, laptops and grand prizes comprising a brand new Suzuki Vitara car, which will be scooped by a lucky individual account holder, and a Nissan pick-up for a lucky SME customer.

Experts say the banking industry in Tanzania had been
performing well in recent years as opposed to the past.

Statistics show that, as at December 31, 2006, the sector had a total customer deposits worth 5.3tn/-, an increase of 221 per cent from 1.7tn/- in 2002.

Total loans and advances, on the other hand, had increased at a higher rate of 320 per cent, from 566.6bn/- in 2002 to 2.4tn/- in 2006.

During the past five years, total banking industry assets had increased by 197 per cent, from 2.2tn/- in the year 2002 to 6.6tn/- in the year 2006.

* SOURCE: Guardian