Tanzania Daily News (Dar es Salaam)
8 December 2011
Many institutions in Tanzania have resolved to base their operations in urban centers because it remains very difficult to provide financial services to farmers in rural areas, Small and Medium Enterprises as well as low income households whose main occupation is small scale crop production and animal husbandry.
But, the Kilimanjaro Cooperative Bank Limited (KCBL) is among few financial institutions that have decided to differ by taking its banking services deep into rural areas to reach the disadvantaged communities.
KCBL with its Head Office in Moshi Municipality, Kilimanjaro region was established by the Cooperative Societies in the region to help majority people access the financial services offered by the then existing commercial banks in the region.
After introduction of free market economy in 1990s, the Cooperative sector was considered not credit worthy and high risk. Therefore, KCBL was established in 1996 to fill this gap by first mobilizing savings from the public, especially Cooperatives and the lending to the public particularly in rural areas, targeting the advancement of production, crop marketing and other services to the rural population.
The Bank has dual registration i.e. both as a Cooperative Society and as a Bank. Share holding and ownership is limited to the Cooperatives, but the services offered are open to the public.
KCBL boasts of being the only Cooperative Bank in the country following the disbandment of the then National Cooperative Bank (NCB) and therefore geared at bringing back the good old memories of Cooperatives power.
The Bank values the importance and existence of Cooperatives by giving them higher interest rates for their deposits compared to other clients and are also charging lower interest rates when given loans. Cooperatives realize quality and higher prices for their products in the market after securing loans from KCBL.
KCBL offers all banking products such as savings account, current account, time deposits, loans, overdraft, TISS/SWIFT, and Western Union Money Transfer. However, the Bank has special products that are unique to KCBL-the Warehouse Receipt System (WRS).
KCBL is proud to a pioneer of the Warehouse Receipt System (WRS) after realizing that it is not possible for an ordinary farmer to have a mortgage and obtain a loan from the bank. WRS was introduced in 1998 to coffee growing farmers whom were enabled to access funds through their coffee collections without the conventional collateral commonly used by other financial institutions.
The only collateral required by KCBL is their coffee produce, good leadership of the Society and the maximum liability certificate. This system has produced positive outcome and great assistance to the members of the Cooperative Societies such that this system is now known and widely used in the country especially in paddy, cotton, and cashew nut growing areas.
Before the introduction of WRS prices per kilogram of parchment coffee was 500/= the current price per kilogram of parchment coffee is above 6,000/=. The quality of coffee has also greatly improved through this system.
KCBL is expecting to start offering ATM services soon through UMOJA switch consortium. KCBL customers will be able to withdraw cash countrywide from any (11) eleven banks that are connected under this arrangement. In addition other new accounts are expected to be introduced soon with the aim of meeting the needs of different customers.
Plans are underway to open other branches so as to incorporate shareholders within and outside Kilimanjaro region. Cooperative Societies are welcome to buy shares while Organizations and Individuals to open accounts with KCBL to enjoy low bank charges while receiving competitive interest rates.
AllAfrica – All the Time