tanzaniaExim Bank Tanzania

Company Profile and History

Exim Bank is a locally established, privately owned commercial bank. Operations began in August 1997 following the liberalization of the banking and financial sector in Tanzania. The Bank broke even within its first 5 months of operations.

Exim Bank has a financial tie-up with the International Finance Corporation (IFC, Washington) the commercial arm of the World Bank and PROPARCO, a French Financial Agency which is dedicated to private investment financing. These two institutions have supported the first subordinated debt issue to Exim Bank (Tanzania) Limited early in March 2003. In addition, IFC is providing technical assistance for capacity building by training local staff and management and by transferring best practice SME banking skills through a twinning arrangement. Funding for technical assistance is being provided through the World Bank Group, Norwegian Trust Fund for Private Sector and Infrastructure. Exim Bank also received approval for a large US dollar facility for confirmation of letters of credit from PTA Bank in Kenya.

IFC described Exim Bank as “an innovative midsize Tanzanian bank specializing in pre-export crop financing as well as trade and financial services to small and medium enterprises. It plays an important role as an intermediary and is well positioned to grow.”

Exim Bank also enjoys a line of credit with HSBC-US, for confirmation of letters of credits (LCs) in imports and exports. This line of credit is supporting Exim Bank in its active participation in financing procurement, processing and packing of various export crops especially coffee, cashews and cotton as well as non-traditional crops such as sesame and pulses, and also in financing procurement and distribution of agricultural inputs.

Exim Bank is a member of Global Banking Alliance for Women (GBA). This alliance focuses on women entrepreneurs’ identification and sharing best practices among financial Institutions from around the world, in order to improve women’s access to financial services and accelerate the growth of women in business.

Exim is the first and the only Bank to introduce International Credit Cards issued in Tanzania, the first to introduce ATM mobile and the first bank to go international by opening a subsidiary in Comoros -Exim Bank (Comoros) Ltd and the first to introduce special women programs. The bank currently has 16 branches in the country and two branches in its subsidiary in the Comoros. The Bank has now installed 29 ATMs and 383 point of sale (POS).

In Country Location

Ground Floor, NIC Investment House, Samora Avenue, Dar es Salaam;
Tel: (022) 2113091;
Fax (022) 2121972

Services and Products

Services and products include Current Accounts, Savings Accounts, Fixed Deposits, the Nyota Junior Savings Plan, Tumaini account and Women Entrepreneur Finance Program. The Bank also offers Debit Cards, Salary Cards, MoneyGram International Money Transfers, SmartStatements, MasterCard and International Credit cards. As a member of GBA Exim Bank introduced two financial products to serve women entrepreneurs and individuals. These products are: Women Entrepreneurs Finance program (WEF) and Tumaini Savings Program.

Its branches are all linked online with V-sat to ensure instant fund transfers. The bank is also under SWIFT map to ensure fast international fund transfers. During the second quarter of 2004, the bank introduced a value added service-MoneyGram, an affordable, faster and convenient way to wire money from person to person.

Number of Employees

267 employees

Financial Information

The bank recorded growth of 21.47 percent in profits from TZS 8.7 billion in 2007 to TZS 10.5 billion in 2008. Deposit increased to TZS 367.7 billion in 2008 from TZS 296.4 billion in 2007 recording an increase of 24.04 percent. The loan portfolio increased from TZS. 162.2 billion in 2007 to TZS. 201.2 billion in 2008.

TShs.Million 2008
Total Assets 478,429
Total Deposits 367,69
Total Loans & Advances 201,240
Shareholders' Funds 36,884
Profit after Tax 10,528

Market Share

In the Tanzanian market, Exim Bank is listed at number six among the top ten commercial banks operating in the country with capital of US$ 500 million.

Business Objective

“We are committed to remain an innovative Tanzanian Bank offering services of international standards. The Bank aims at consolidating its current position in the banking sector as the leader in the mid capital sector and to expand its branch network.”

Business Model

“The bank will strive to exceed the growth achieved in the past years by enhancing the quality of customer service, increase product innovation and tailor made products according to the customers' needs and continue to rightly price its products; and building up a stronger and growing retail deposit.

Credit to the private sector continued to be strong as a result of more lending opportunities. This higher growth was associated to improvements in the business environment and provision of financial services in the economy. Exim Bank took advantage of the increased lending opportunities by increasing lending to the following sectors: manufacturing (23percent); trade/commerce (21percent); agriculture, fishing and forestry (15percent); transport and communication (12percent); tourism, hotels & restaurants (9percent); and real estate and building construction (9percent).

As a way forward, Exim Bank plans to capitalize on retail business. Analysis of the banking industry’s behaviour, have revealed that there is a big shift of most banks’ focus to retail and SMEs customers. While focusing on customer satisfaction, the Bank is geared to introduce a number of innovative new products and services aimed to meet its customers’ needs and expectations, both at retail and corporate levels. These products and services will be designed to complement our existing product portfolio and to give our customers a wider choice in their banking activities.

Given domestic resource constraints for funding for our core business and increased competition among the banks for resources, Exim Bank is planning to adapt a strategy of diversifying funding sources and mix.”

Ownership of Business

Three directors of the bank hold equally 60 percent of the total issued share capital of the bank.

Benefits Offered and Relations with Government

The bank is in the forefront of supporting the government’s economic programmes. Amongst others, Exim Bank has developed a niche in import and export financing. The Bank’s expertise in this area has lead to a number of specially designed products aimed at providing essential link between home trade and importers and exporters. The bank has been actively participating in financing procurement, processing and packing of various export crops, such as coffee, cashews, cotton etc, as well as non-traditional crops such as sesame and pulses. The Bank also finances procurement and distribution of fertilizers and other agricultural inputs to the farmers.

It has further started providing financial services to a majority of the low-income population. The bank is specializing in pre-export crop financing as well as trade and financial services to small and medium enterprises and has specifically been used as an agent for managing the agricultural inputs fund.

The government repealed the Banking and Financial Institution Act 1991, Cap 342 (the “BFIA ‘91”) and replaced it with the Banking and Financial Institutions Act 2006 (the “BFIA ‘06”). The BFIA ‘06, like the BFIA ‘91, is the legislation from which the BoT derives its power and authority to grant, suspend and revoke licenses to banking and financial institutions engaged in banking business in Tanzania.

Under the BFIA ’06, the BoT must now consider and take into account in respect of any applicant:

  1. the extent to which the policies, procedures and internal controls of the applicant are designed to promote sound financing of economic activities in underserved communities;
  2. the extent to which the intended training and employment programs of the applicant are aimed at promoting professionalism in the financial sector; and
  3. such other matters as the BoT may deem necessary and appropriate for carrying out the objectives of the BFIA ‘06.
Whilst the first two are quite clear, there is clearly some subjectivity to be exercised by the BoT on the third element, and firms should be prepared to answer wide-ranging queries from the BoT on an application.

Under the BFIA ’06 the new concept of suspension of license was introduced, where the BoT has the authority to suspend a license where:

  1. it determines that a bank or financial institution has failed to meet any one of the capital requirements;
  2. the BoT is of the opinion that the affairs of the bank or financial institution are being conducted in a manner that is detrimental to the interests of its depositors. Interestingly, although the first test is clear-cut (either one does or does not meet the capital maintenance requirements), we once again as per the issuing of a license in the first instance see a level of subjective interpretation vested in the BoT in it having the power to determine whether there are circumstances which exist which would justify the revocation of a license.

Under the BFIA ’91, an investor was required to raise a minimum of one billion Tanzanian Shillings to form a bank. Under the BFIA ’06, the amount has been increased substantially and applicants for banking license now need to have and maintain at all times a minimum core capital of not less than five billion Tanzanian Shillings. Additional requirements relating to capital reserves have been introduced under the BFIA ’06 in that every bank will be required to maintain, at all times:

  1. core capital of not less then 10percent of its total risk-weighted assets and off balance sheet exposure;
  2. total capital of not less than 12percent of the same risk;
  3. an unimpaired capital at least equal to the minimum cash requirement.

New provisions have also been introduced through the BFIA ’06 in an attempt to reduce the level of risks banks and financial institutions incur, restricting credit exposure to customers and connected lending. Banks and financial institutions are prohibited from lending to a single person in excess of amounts equalling 5percent or more of the core capital of the bank or financial institution or 3percent per cent of the core capital for a micro-finance institution. Exceptions may be available if the lending is:

  1. guaranteed by the government of Tanzania;
  2. secured against cash or near cash items;
  3. guaranteed by a first class international bank;
  4. against securities issued by the government of Tanzania or the BoT. The BFIA ’06 also empowers the BoT to set limits on the amount of lending that can be provided to connected parties.

In order to improve the supervision of banks and financial institutions, the BFIA ’06 vested the power to supervise, coordinate, control, and conduct the examination of banks and financial institution to the BoT.

Product Development

In April 2009 Exim Bank opened its doors in Zanzibar and plans to open branches in Mbeya, Iringa and 3 more branches in Dar es salaam-Ubungo, Buguruni and Kariakoo.

In September 2009 Exim announced that it will open a branch in Djibouti. The bank now awaits the approval of the Bank of Tanzania (BoT) to venture into that country.