The few remaining farmers’ co- operative banks in the country stand a better chance to grow if enough capital is injected into their operations. This will enable them to compete in the financial market.
Kagera Farmers Cooperative Bank Acting Manager, Alden Kilaja, said on Thursday that farmers’ cooperative banks are owned by poor farmers who are not in a position to inject enough capital.
She added that as a result most of them have closed down their business permanently due to the stiff competition in the market and the remaining few are growing in a painfully slow way.
Citing the example of her bank, she said that the institution opened business in Kagera Region in 2002 with a capital of 200m/- only.With such a small capital, she said, the bank operated at a loss for many years because it had no sufficient funds to modernise its operations, expand services and pay good salaries to its workers in order to retain them.
“For many years we were operating at a loss because the shareholders did not inject additional capital. The recent profit of 106m/- was realised after we got a grant from Financial Sector Deepening Trust (FSDT),” Ms Kilaja stressed.
The manager noted that the grant was used to modernise the bank’s operations, adding that the financial support had “a very good impact on the bank’s operations.”
She, however, noted that the bank is still facing a serious shortage of capital. “This financial year Kagera Cooperative Union (KCU) who are the main shareholders, have injected an additional capital of 1.5bn/-. We are grateful for that but the capital is still small,” she said.
Ms Kilaja said the bank’s workers have been running away to look for greener pastures in other financial institutions, because the bank is not in a position to pay attractive salaries that would make them continue working with it.
She said that opportunity for growth was obvious if capital is made available. She called upon the shareholders to inject more capital into the bank’s operations in order to enable it to expand its services and compete effectively in the market.
KCU General Manager, Vedastus Ngaiza, said that the Union was committed to seeing the bank grow through injection of additional capital from time to time.
“This financial year our annual general meeting (AGM) has approved 1.5bn/- as additional capital which has already been injected. The injection of additional capital will be done from time to time in order to enable the bank to grow,” he said.
Source Tanzania Daily News
