Community Banks Association of Tanzania (COBAT) is a member-based institution providing services directly to its members and indirectly to members’ customers (communities served by member banks). Services offered to members are geared towards increasing member capacity in serving the rural population of Tanzania in a win-win situation that communities served are developed through the use of products offered by member banks and those member banks operate at reasonable margins, hence reaching more rural communities.

The current conditions in community banking services are the most challenging we have experienced in over 20 years of their existence in Tanzania. Our priorities therefore, require major changes to reflect that.

Organizational History and Structure

The Community Banks Association of Tanzania (COBAT) was found by all Community Banks in the year 2005.  The Association was officially registered under the Societies Ordinance of 1954 (rule 5) with Registration Number SO 14198 issued on 1st day of February 2006. 

COBAT started with seven banks (CBs) as the founding members of which four were regional banks: Dar es Salaam Community Bank (DCB), Kilimanjaro Cooperative Bank Limited (KCBL), Kagera Farmers Cooperative Bank Limited (KFCBL) and Uchumi Commercial Bank (UCB); and the other three were district level banks; Mufindi Community Bank (MCB) now MUCOBA Plc, Mbinga Community Bank (MCB) and Mwanga Rural Community Bank (MRCB).

Since its formation COBAT has witnessed the birth of four new members: Efatha Bank Limited (Efatha), Njombe Community Bank (NJoCoBa), Tandahimba Community Bank (TaCoBa) and Meru Community Bank (MeCoB), with membership base of ten (10) banks following transformation of DCB into a fully fledged commercial bank.

Community banks are defined by Bank of Tanzania as banks with share capital of 2 – 5 billion, these banks are allowed to operate within a region only and to qualify as a national bank, they must have share capital of more than Tshs 15billion. The definition of community bank is taken a step further by the Association to mean a bank which allows respective community to participate in its ownership and is deep rooted in the community development. The community participation in the ownership may be in the form of Individuals, SACCOS and Solidarity Groups, Government through District and Municipal Councils, Private and Public organizations.

Current community banks are providing convenient access to appropriate and affordable financial services in 8 regions of Tanzania mostly in rural areas where 75%-80% of Tanzania live, mostly provided in group-based approach. COBAT is focused on establishing a network of community banks by having at least one community bank in each region of Tanzania by the year 2021.

All over the country community banks have complimented efforts to bring positive changes to the rural communities. However, most community banks are facing challenges on capital adequacy ratios and lack of robust Information and Communication Technology (ICT) Platform. The low level of financial literacy and low levels of income in rural areas makes it difficult for rural communities to raise the required ‘enhanced’ minimum capital for the existing community banks and establish new community banks in line with regulatory requirements. Almost all regions, which are yet to establish community banks, have appreciated the role played by community banks in the society and have shown the desire to establish their own banks if they obtain support in raising capital and other shared services that bring efficiency and effectiveness in service delivery.

In a drive to strengthen existing community banks and enhance their operational efficiency, COBAT is looking into mechanisms of centralizing shared services among members for economies of scale among them, with the objective of raising efficiency and increase shareholders’ value. Similarly efforts are being directed at raising capital from various sources, including Government institutions as well as private, local and international investors

Contact US

P.O. Box 60651,
Green Acres House,
New Bagamoyo Road,
Post code 14107,Tanzania.

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