Cross-border banking is an important technique for the East African economy

Adela Madyane

CRDB Bank in collaboration with other monetary agencies and non government organizations are ready to minimize the challenges facing business people and agriculturalist in value chain between Tanzania, Burundi and DR-Congo.

Speaking during the Tanganyika Investment and Business summit CRDB Burundi Managing Director Fredrick Siwale said in the last ten years they have made great step into the market ladder to now becoming the third largest bank in Burundi

“CRDB is expanding to regional bank after getting a go ahead to enter DRC, this will elevate our operations in Burundi as well,”he said.

A country that has 20 Providences and 119 communal is also operating on CRDB’s agents to take close services to clients. The lender has 600 agents and 12 super agents

” We are targeting to raise agents numbers to 1000 and double super Wakala number by the end of this year,” Mr Siwale said. 

CRDB Burundi in this year quarter one net profit jumped up 196 per cent to 5.0billion franc (2.5 million US dollars) in comparison of similar quarter last year.

Talking on loans Siwale said most of loans goes to tourism, industrial, housing and agricultural sectors and interest is ranging between 10 and 15 per cent.

“Some loans in agriculturial, tourism and housing sectors are subsidized by the government to suppress interest rate,” Mr Siwale said adding, “hence the rate of these loans are below 10 per cent.”

The bank, one of the leading lenders in Tanzania, is farther consolidating its position in Bujumbura by increasing her capital of 19 million US dollars compared to 13 million US dollars when entering Bujumbura market in 2012 while in Congo is trying to reduce transferring funds challenge.

The MD thus challenges Tanzanians to cross the border and invest in Burundi as the economy is fast expanding and need industries, tourism infrastructure, house, transport and the like

Due to assets growth has enabled the bank to financial some Burundians government strategic projects including the construction of hydropower damn, and a largest fertilizer factory.

In Tanzania CRDB is collaborating with Private Agricultural Sector Support Trust (PASS) to support agricultural value chain by standing as trustees when lending for loan to purchase any agriculture related need which include agriculture inputs for handsome production, value addition, as well as increasing knowledge.

In the last 25 years the exports of Tanzania to Burundi have increased at an annualized rate of 10.1 per cent, from 6.35million US dollars in 1995 to 69.7 million US dollars in 2020. In 2020, Burundi exported 8.55million US dollars to Tanzania.

Coming to CRDB Congo Managing Director Jessica Nyachiro assured the meeting that to reduce the money transferring challenge the bank will spearhead the use of digital channels which will simplify local and cross border money transfer and speed up transactions at affordable costs.

Some Congolese traders and business people said the presence of CRDB Bank in DR-Congo is long overdue and want it to be just like yesterday.

The Kalemi Mayor Kakudji Kalama said traders from both sides of Lake Tanganyika are facing a number of banking challenges but the coming of CRDB to Congo will simplify cross border transactions.

“Our Providence (Tanganyika) is the gateway of most lake Tanganyika trades from Tanzania and we are heavily linked to Kigoma” Kalama said. 

Some traders said the absence of lender like CRDB make it hard for them to transfer funds from Tanzania to DRC hence impeding smooth business transactions between the two nations.

A DRC oil trader, Mr Nondo Ibrahim, asked the bank to consider starting exchanging shilling and franc to save them from burden exchange losses and hassles–from franc to dollar and then to shilling.

On top of that they said they ended not only in losing business but also lost money in fraudulent  transaction and often time lands at hands of muggers.

CRDB Congo Head Jessica said shilling/franc exchange is possible but need the approval of both central government banks.

“We are accepting Zambia’s kwacha at Tunduma border. And once we get the approval it’s possible for franc as well,” she said.

CRDB is strategically to open up Lake Tanganyika corridor centred on creating an enabling environment for entrepreneurship, supporting the building of a strong industrial economy and stimulate the growth of the private sector.

Other areas are opening up through technology to facilitate business growth, supporting key chains of economic value and promoting sustainable investment while solving socio-economic challenges.

On his side the PASS Western Tanzania Zonal Manager Kigoma ofifice that serve Katavi, Tabora and Kigoma Ayoub Mbezi said they are working with about 14 banks to support the increase of finance access to strengthen the development in the agricultural sector.

He said as agriculture contribute 26.9%of country’s economy they had to make sure they support the agriculture value chain so that the beneficiaries can easily penetrate into reliable markets both national and international with the quality products and thats work hand in hand with monetary agency to make sure beneficiaries never fail their target of development via agriculture

” Working with guarantee partners like CRDB (Tanzania Agriculture Development Bank)
TADB, ( National Microfinance Bank) NMB and ( National Bank of Commerce) NBC have contributed to Tsh billion 7 annually which is expected to increase up to Tsh 9 billons next year annually as loans to our beneficiaries, we all intend to increase exportation of Tanzanians goods to countries of DR Congo’ Burundi, Zambia, as well as Rwanda by empowering them economically” said Mbezi

Since its establishment PASS in 2000 has managed to stand as trustee on 1.2 trillion to more than 1.7 entrepreneurs which is equal to 31.4%. of all loans awarded under agricultural sector in 2021.

Mbezi said as Kigoma is a hub of economy in all great lake countries and that her people’ economy greatly depend on lake and agriculture (palm oil, maize, cassava, and beans) be more exported they have to manage strengthen services to 9400 beneficiaries with loan net amount of 4.5 billion for the period of January -May 2022.