Challenges facing community banks in Tanzania: a case study of Mwanga and Dar es Salaam community banks, 2004.

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University of Dar es Salaam
Banking industry in Tanzania dates back to 1905 when the first bank opened its doors in Tanzania. For about a century now banks and financial institutions have been concentrated in urban areas and not in the rural areas where majority of Tanzanians live. Due to the concentration of banks in urban areas, financial services and products offered by the financial institutions were not accessible by majority of poor people in the rural areas. It is with this scenario that community banks are established in various parts of the country in order to fill the financing gap created by the commercial banks. This study was about challenges facing community banks in Tanzania. The study was a case study conducted in Dar es Salaam and Mwanga. The field research was carried out from July 2004 to September 2004. Findings and analysis indicate that the main challenges facing the community banks in service delivery to the targeted communities as lack of competent human resources in the micro finance, small equity, lack of business opportunities, poor infrastructure, competition from other financial institutions and NGOs offering financial products and low profits. Furthermore management and non-customer have different opinions with strength of the challenges facing the community banks. It is on the basis of the entire findings and analysis of the study that some recommendations are put forward as of the effort towards promoting and development of community banks in Tanzania. The study recommends for changes to the rules and regulations so as to have different financial rules for CBs. Government is also recommended to make some changes so as to give incentives in terms of taxes and financial support by way of increasing loanable funds to CBs. It also recommended to CBs to look on the ways of cooperation with other commercial banks especially in the area of sharing the technology.
Banks and banking, Cooperatives, Mwanga, Dar es Salaam, Tanzania
Massawe, R. S. L. (2004). Challenges facing community banks in Tanzania: a case study of Mwanga and Dar es Salaam community banks, 2004. Masters dissertation, University of Dar es Salaam. Available at (