TANZANIA – Mwanga Community Bank Limited (MCBL) and Hakika Microfinance Bank Limited (HK MFB), a private limited liability company are set to merge after they bought out EFC Tanzania Microfinance and formed MwangaHakika Microfinance Bank.

Bank of Tanzania’s (BoT), Victor Tarimu, Manager Microfinance Banks and Bureau de Change Supervision, said the regulator has already issued the new microfinance bank license and the capital put is TSh4.618bn (US$2.02m).

Mr Tarimu revealed that MwangaHakika Microfinance Bank’s headquarters will be in Dar es Salaam – where EFC was operating.

Under the new merging structure, Mwanga bank will have a minority share of 25.07 per cent while Hakika controls the majority 74.93 per cent. The two banks, which operate in Kilimanjaro, Arusha and Manyara.

He said the central bank has already issued a license recently to now the newly microfinance institution—MwangaHakika Microfinance Bank and the first managing director is Jagit Singh—former MD of Mwanga.

That means MwangaHakika Bank will operates from Dar es Salaam and have branches Kilimanjaro, Arusha, Manyara and Dar where the former three banks previous operate.

According to Daily News, Mwanga Bank services 75,000 clients, 1,671 saving groups with a total of 41,000 members, 321 other economic groups and 21 Saccos with total members of 630.

EFC Bank combines both social impact and financial sustainability by reaching clients whose needs were not specifically addressed by other financial institutions previously.

Hakika is a private which was established by the Arusha Club Saccos and some individuals to provide banking services and products to the under banked community in Arusha, Manyara, Kilimanjaro and beyond. Before the emerging of the three banks there were six community banks and five microfinance banks.

This means the market will remain with five community banks and three microfinance banks.

In 2018, the sector witnessed the merging of Twiga Bancorp, Tanzania Women’s Bank (TWB) to TPB Bank, after the two former banks failed to meet the capital adequacy as required by the regulator.

Again, in January 2019, BoT announced the merger between Azania Bank and Bank M, which was under statutory management of central bank since 2018.

Last March, Exim Bank takes over the operation of UBL Bank although the value of the deal was yet to be determined.