Pursuing Efficiency While Maintaining Outreach : Bank Privatization in Tanzania
Profitability improvements after the privatization of a large state-owned bank might come at the expense of reduced access to financial services for some groups, especially the rural poor. The privatization of Tanzania's National Bank of Comme...
| Main Authors: | , |
|---|---|
| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
Washington, DC: World Bank
2012
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2008/12/10140391/pursuing-efficiency-maintaining-outreach-bank-privatization-tanzania http://hdl.handle.net/10986/6330 |
| Summary: | Profitability improvements after the
privatization of a large state-owned bank might come at the
expense of reduced access to financial services for some
groups, especially the rural poor. The privatization of
Tanzania's National Bank of Commerce provides a unique
episode for studying this issue. The bank was split into the
"new" National Bank of Commerce, a commercial bank
that assumed most of the original bank's assets and
liabilities, and the National Microfinance Bank, which
assumed most of the branch network and the mandate to foster
access to financial services. The new National Bank of
Commerce's profitability and portfolio quality improved
although credit growth was slow, in line with privatization
experiences in other developing countries. Finding a buyer
for the National Microfinance Bank proved very difficult,
although after years under contract management by private
banking consultants, Rabobank of the Netherlands emerged as
a purchaser. Profitability has since improved and lending
has slowly grown, while the share of non-performing loans
remains low. |
|---|