United Republic of Tanzania: Financial System Stability Assessment-Press Release; Staff Report; and Statement by the Executive Director for the United Republic of Tanzania

December 4, 2018

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United Republic of Tanzania: Financial System Stability Assessment-Press Release; Staff Report; and Statement by the Executive Director for the United Republic of Tanzania, (USA: International Monetary Fund, 2018) accessed November 21, 2024

Summary

Tanzania’s bank-dominated financial sector is small, concentrated, and at a relatively nascent stage of development. Financial services provision is dominated by commercial banks, with the ten largest institutions being preeminent in terms of mobilizing savings and intermediating credit. Medium-to-small banks rely systematically more on costlier, short-term, interbank financing and institutional deposits and have markedly higher operating costs. These structural features underpin financial stability challenges which are significant. Bank asset quality has deteriorated sharply in recent years, and under-provisioning is significant, belying the apparently comfortable capital cushions. Credit growth has fallen precipitously, corporate debt loads have risen, and their cash flows are weak. Dollarization of bank balance-sheets raises the possibility of solvency stress under shocks being exacerbated by funding liquidity pressures, especially at smaller banks.

Subject: Banking, Commercial banks, Financial institutions, Financial Sector Assessment Program, Financial sector policy and analysis, Financial sector stability, Foreign exchange, International trade, Nonperforming loans, Trade balance

Keywords: Bank asset quality, CR, Financial Sector Assessment Program, Financial sector stability, FSAP reform agenda, Global, ISCR, Nonperforming loans, Problem bank oversight, Repo market development, Tanzanian bank, Trade balance

Publication Details

Pages:

80
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2018/346
Stock No:

1TZAEA2018002
ISBN:

9781484387597
ISSN:

1934-7685

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