Tanzania: Twiga Bancorp Set to Partly Resume Services

The Bank of Tanzania (BoT) announced yesterday it has completed financial assessment of the undercapitalised Twiga Bancorp, saying the institution is set to resume part of its operations tomorrow.

Official statement issued by the Central Bank said the institution's Statutory Manager is expected to outline other services to be offered, including collection of debts from client alongside some key guidelines in accessing the services.

"By powers vested by the Banking and Financial Institution Act 2006, 58 (2) (a) and (b), BoT has completed evaluation of Twiga Bancorp liquidity. This means that the bank can start offering part of its service from Tuesday this week," read part of the statement issued in Dar es Salaam yesterday. The Central Bank is also working on alternative means to address the liquidity issue facing the institution.

"The option which is now given priority to the bank is to seek new investors, the process which will make the financial institution become diligent," it said, adding that such an exercise will take at least three weeks.

The statement said after the investor is secured, the Central Bank will enter into an agreement with it to ensure that it injects the required capital to revamp the undercapitalised institution.

It said, however, for now the institution will continue to be under receivership until a new investor is obtained. The Central Bank announced in October 28th that it had put Twiga Bancorp in receivership for lack of adequate capital.

BoT governor Benno Ndulu, addressing a press briefing in Dar es Salaam, said that Twiga will remain open for only a week. BoT has also suspended the bank's Board of Directors and senior management team, thereby appointing a statutory manager to take over its operations.

In July this year, the government commissioned a study to look into options of equity investment after the bank was reported to have been facing liquidity issues.

Twiga Bancorp Limited was licensed in 1998 by the regulator as a non-bank financial institution under the Banking and Financial Institutions Act, 1991. The government-owned Twiga was permitted to undertake all banking transactions apart from taking deposits on current accounts.