CRDB Bank expands economic growth in Tanzania for underserved businesses and communities

Tanzania’s CRDB Bank is on a mission to provide financial services to customers in rural areas of the country. The bank’s group chief executive officer and managing director Abdulmajid Mussa Nsekela revealed the key drivers of the bank’s business performance growth in 2022, and its role in bringing small and medium-sized enterprises (SMEs), agriculture segments and overlooked communities into the formal economy.

Nsekela took the lead at CRDB in October 2018 when it was under-performing. He successfully reformed the bank and returned it to profitability by 2022. Being one of the top banks in the country, CRDB can leverage a large balance sheet.

In 2022, the bank recorded 29% growth in gross revenue to reach TZS 265.9 billion ($113.65 million). Its retail deposits increased by 28%; return on average asset stood at 3% and cost-to-income ratio increased slightly from 61% to 67%.

Its business performance was driven by healthy deposits and borrowings that grew 25% and 91%, respectively, from 2021 to 2022. It has outgrown its customer base by 16% to reach more than four million customers in 2022.

Nsekela said: “The financial inclusion agenda and the bank’s expansion in Africa are supported by our regional and global partners and investors.”

CRDB has a large network with more than 250 branches across Tanzania and 20,000 banking agents. This high agent number allowed the bank to support customers in wider areas in the country. The bank’s digital platform for agents enabled them to reach and serve customers—both underbanked and banked—more efficiently.

CRDB is investing in technology to deliver services through mobile, the internet and third parties.

Leader in financing agriculture in Tanzania

During his first year at CRDB, Nsekela spearheaded the bank’s accreditation by the United Nations Green Climate Fund as a financial intermediary in green financing. CRDB became the first commercial bank in East and Central Africa to be accredited as a Direct Access Entity, which allows the bank to finance green projects that impact social and economic development in Tanzania.

In October 2021, the bank secured $100 million in funding to support climate-resilient agriculture and technology adaptation in the country. With a market share of 40%, CRDB leads in financing agriculture in Tanzania, a significant industry that employs more than 65% of the workforce.

CRDB is starting to expand its cross-border footprint to more countries in Africa. Currently, the bank has a presence in Burundi, while operations in the Democratic Republic of Congo are at a pre-launch stage.

Five-year strategy to drive digitalisation

Nsekela said: “CRDB Bank has embarked on a five-year strategy to drive business growth using digitalisation, with a key focus on SMEs, women and youth, agriculture, and the green and blue economies. We have regional and international partners, and investors to support the financial inclusion agenda in the key segments, and the bank’s expansion in Africa.”

The bank introduced self-account onboarding in 2022. This initiative is part of the bank’s digital strategy to create higher value for customers, offering access to services at their convenience without having to visit a physical branch. As a result, 68% of total new customers opened their accounts using self-account onboarding.

Through its mobile banking platform Simbanking, CRDB aims to connect customers, government services, and SMEs on one platform. Customers can open bank accounts digitally, and perform functions such as pay insurance premiums and make fund transfers to other bank accounts or mobile wallets within Tanzania, both in local and foreign currencies.

CRDB’s Malkia Account is a dedicated proposition for women designed to support them in their financial obligations and personal goals in investment, education, business and healthcare.

The bank has integrated its systems with other partners such as government, mobile network operators, billers, and business entities to unfold wider value propositions to its customers as they interact with these third-party systems via the banking platforms.

CRDB uses robotic process automation to reduce human intervention for cheque encashment, saving resources for both customers and the bank. Looking forward, CRDB will focus on scaling its digital strategy towards automation to drive efficiency.

In 2022, the bank leveraged big data to analyse customer behaviors to detect inactive customers and build long-term relationships with existing customers by tailoring services and products for effective customer retention.