Factors affecting the growth of commercial banks in Tanzania.

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University of Dar es Salaam
In 1991, the Tanzania Banking and Financial Institution Bill was finally approved by the Parliament. The Act permits both domestic and foreign banks to operate interregional branch network from 1991. Foreign banks then have the same legal rights to open new branches (representative offices) as Tanzanian banks, whether they operate in the United Republic of Tanzania (URT) through a separate subsidiary or through a direct branch from their home country. From then on a number of both domestic and foreign banks have been introduced in the country. The number of banking offices has grown from about four at the end of 1985 to almost twenty by year end 1998. Over the same time period, the value of assets of commercial banks in Tanzania has increased from Tanzanian Shillings (Tshs 35,681.4 millions to Tshs1, 606,811.7 millions (BOT, 1999). The recent rapid growth of commercial banking has both led to major changes in the regulation of banks and stiffened competition in the banking sector. This study sought to determine the factors causing this growth of commercial banks in Tanzania. It examined the determinants of growth in commercial banks' participation in Tanzanian markets over the period 1985-1998. The dramatic increase in the size of banking activity, as it is measured by the growth in total assets, was found to be directly related to changes in the net direct investments, the current rate of profits, expected growth of domestic business, international business expectations, the exchange value of the shilling and the passage of the banking and financial institutions Act of 1991.
Available in print form, East Africana Collection, Dr. Wilbert Chagula Library, Class mark (THS EAF HG3397.N738)
Banks and banking, Commercial banks, Tanzania
Nsulwa, G. (2000). Factors affecting the growth of commercial banks in Tanzania. Master dissertation, University of Dar es Salaam.