Dar es Salaam Dar es Salaam Community Bank (DCB) is in plans to raise Tsh31b ($19.75m) through a rights issue. (A rights issue deals with the selling of new shares to raise capital.) The shares are offered to existing shareholders in proportion to their current shareholding, respecting their pre-emption rights. According to an expert, the price at which the shares are offered is usually at a discount to the current share price, which gives investors an incentive to buy the new shares - if they do not, the value of their holding is diluted. The bank's Managing Director, Mr Edmund Mkwawa announced the new move amidst a new license from the central bank which qualifies DCB to be a fully-fledged commercial bank. "We are planning to raise our working capital by Tsh16b ($10.18m) through a rights issue arrangement to sustain the bank's consolidation programme," Mkwawa said in Dar es Salaam last week. He added that the resolution to increase authorized capital from Tsh15b ($9.54m) to Tsh31b ($19.75m) by creating Tsh16b ($10.18m) working capital undertaken to comply with the central bank's directive. He said the share will be sold at the Dar es Salaam Stock Exchange (DSE) at a discount of Tsh380 ($0.242) instead of Tsh620 ($0.394) which is the current share price at the bourse. However, according to the bank's chief they are awaiting approvals from the Capital Markets and Securities Authority (CMSA) and the Dar es Salaam Stock Exchange (DSE). "The new license presents the challenge of rasing the banks capital to Tsh31b in order to operate efficiently and independently," he noted. According to the bank's chief, the bank has grown during the last nine years since it was established and is ranked first in East Africa and fifth in Africa as the best performing stock. The bank's Board Chairman, Ambassador Paul Rupia said that the new license will pave way for the bank to open more branches throughout the country and offer corporate banking services. Amb. Rupia said although the institution will be operating as a fully commercial depository its vision and mission to help people with low income will remain the same. It should be noted that the purpose of establishing the bank was to help the citizens of Dar es Salaam region who were unable to access services from commercial banks. In order to handle the bank operations smoothly, the bank's board has changed its organization structure. The bank was able to make profit after tax amounting to Tsh3.2b ($2.04m). The bank has formed new departments as follows; small and medium enterprises, import and export, treasury, marketing and public relations and corporate department that will deal with corporate customers as well as the government and municipal councils.