Browsing by Author "Baruti, Elias Emmanuel Mwemezi"

Now showing 1 - 1 of 1
  • No Thumbnail Available
    Item
    The role of National Provident Fund (NPF) as a non-bank financial institution in the Tanzanian transition period from planned to market economy.
    (University of Dar es Salaam, 1998) Baruti, Elias Emmanuel Mwemezi
    The financial sector reform programmes adopted in Tanzania since 1991 have led to remarkable changes to the country's economy and the financial sector in particular. With these changes, we have witnessed, inter alia, the broadening of financial instruments and institutions. The financial sector reforms not only have availed the long awaited services to the general public but also led to competition among the existing and newly established financial institutions in the country. By and large, this situation of changing economic environment in Tanzania has compelled both the banks and non-bank financial institutions (NBFIs) to determine how best they can adapt themselves to these changes and operate profitably. The National Provident Fund (NPF) being one of the NBFIs is envisaging transforming itself into a Pension scheme. This will have implications on NPF's operations and hence a need for more investment income in order to be able to pay better benefits to members. The Pension payments will be pegged to the prevalent inflation rate and more types of benefits will be offered as opposed to the current scheme of lump sum payments. Hence, the NPF has to adopt measures which will be geared to unearthing new sources of revenue in order to increase its earnings and be able to meet the challenges of operating a Pension Scheme. The NPF Investment Policy (1997) stipulates that the NPF may establish its own bank, say a Social Security Bank, which will facilitate its operations: Thus, given the perceived bank's multiplier effects on NPF's operations, the decision to diversify into the perceived bank's multiplier effects on NPF's operations, the decision to diversify into banking business will be one of the alternatives that will confront the NPF. Such a decision was made by a similar institution, the Social Security and National Insurance Trust (SSNIT) of Ghana and led to remarkable achievements on the socio-economic front in that country. The main focus of this study has been to assess the potential of the NPF to diversify into banking business. Towards this end, the SSNIT that operates a bank as one of its subsidiaries acted as our reference model because of the similarities pertaining in the two countries and confronting the two institutions. The study is divided into five chapters. Chapter one provides the background information to the study. It gives the general introduction, the background to the study, statement of the problem, objectives and significance of the study, statement of hypotheses, scope and limitations and the organisation of the study. Chapter two presents literature review on the subject. It also surveys studies on Social security investments in Tanzania and elsewhere. In addition, the chapter presents an overview of the financial sector reforms in Tanzania. Chapter three dwells on research methodology whereby the model specification is discussed. The data used in the study and its sources are also discussed in this chapter. In chapter four the research findings are discussed. Finally chapter five provides the summary of the study, conclusion, recommendations. It also suggests areas for further research.