Machinga bank: Vibindo set to issue shares soon

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Feb 11, 2006
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2009-01-08 11:05:50
By Perege Gumbo


The establishment of the envisaged petty traders` bank Tanzania Machinga Bank Limited (TMBL) would help curb the ever increasing number of traders in Dar es Salaam by providing them with essential start-up capital for their ventures.

The Employment Policy of 2007 estimates that 75 per cent of people are now employed themselves in petty trading business, an act that made establishment of the bank an essential thing.

Vibindo Society Chairman Gaston Kikuwi said in an interview that the setting up of the bank had passed all essential legal stages and was now at the stage of issuing shares to stakeholders to raise the required capital.

The Bank of Tanzania (BoT) regulations require among other things that the setting up of a banking institution should keep 5bn/- as core capital with the banker of all banks.

``We`re determined to raise that money as we have enough members who are determined to see the bank established,`` he said.

The Vibindo Society alone has more than 40,000 members across Tanzania which was a good stepping stone towards the smooth establishment of the bank.

In a recent stakeholders` meeting attended by more than 800 petty traders, the city Mayor, Adam Kimbisa, refuted underground rumours that the envisaged TMBL was being spearheaded for political ends.

Speaking amid applause, Kimbisa said what had been giving him sleepless nights was the status of petty traders and the way their ventures could be formalised through provision of trading premises as well as soft loans for their economic and business endeavours.

``Dear friends, I travelled to the Eastern countries as well as the Western nations looking for any assistance which could enable us form our own petty traders` bank but in all vain,`` he said.

In all his efforts, he said, the responses were that let the needy initiate the bank and the assistance could come in later.

Earlier this year when the foundation stone for building of the Machinga complex was laid by President Jakaya Kikwete, petty traders said that plans had reached advanced stage for establishment of their bank.

However, since then there have been underground rumours that the bank was politically motivated, which raised many questions about future sustainability and independence if it started to operate.

Kimbisa said the setting up of the bank had been influenced by the fact that the population of Dar es Salaam City had been growing at an alarming rate with most of its inhabitant being youths.

Between 2001 and 2002, the city had an estimated population of 2.8 million, but the number had suddenly gone up to 4.3 million todate.

The increment needed durable solutions pertaining to business and trading facilitation, prompting plans for having concrete strategy for addressing traders` problems.

In the triangular form-plan, three permanent solutions were designed including, building of business parks, industrial parks and the financial parks.

The business parks represent areas such as the Machinga complex where petty traders would do their businesses while industrial parks would involve small businesses, particularly engaged in production on small scale to sell to the business park traders.

The last angle of the triangle the financial parks would provide loans at affordable conditions that would be met by petty traders, thereby making it possible for the small business people in the country to thrive.

``We have already secured funds for developing an industrial park for local small producers, only what is holding us back is lack of enough space for building the complex,`` he said.

Kimbisa`s appeal to the petty traders to ignore street rumours followed after a presentation of the process and stages that had been reached towards establishing the bank by Vibindo Society Chairman Gaston Kikuwi.

Kikuwi said that establishment of the bank starting with Dar es Salaam region was important and inevitable following the big number of petty traders and the ever growing needs of the sector.

One of the challenges cited during the meeting was the high statutory capital required by BoT 5bn/- to initiate a bank, which he said could delay a little bit the realisation of their dreams.

However, enthusiasm and desire showed by participants suggest that petty traders are determined to buy shares and establish their own bank.

SOURCE: Guardian
 
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