ISSN 0856 – 8537 FINANCIAL SECTOR SUPERVISION ANNUAL REPORT 2019 23RD EDITION For any enquiries contact: Directorate of Financial Sector Supervision Bank of Tanzania 2 Mirambo Street 11884 Dar es Salaam TANZANIA Tel: +255 22 223 5482/3 Fax: +255 22 223 4194 Website: www.bot.go.tz TABLE OF CONTENTS MESSAGE FROM THE GOVERNOR ......................................................................... iii EXECUTIVE SUMMARY ............................................................................................. iv CHAPTER ONE ............................................................................................................ 1 OVERVIEW OF THE FINANCIAL SECTOR ................................................................ 1 1.1 Banking Institutions ................................................................................................................. 1 1.1.1 Branch Network .................................................................................................................................................. 1 1.1.2 Market Share ...................................................................................................................................................... 2 1.1.3 Agent Banking .................................................................................................................................................... 3 1.2 Other Supervised Institutions.................................................................................................. 3 1.2.1 Mortgage Finance............................................................................................................................................... 3 1.2.2 Representative Offices ....................................................................................................................................... 3 1.2.3 Bureau de Change ............................................................................................................................................. 4 1.2.4 Credit Reference Bureaus .................................................................................................................................. 4 1.2.5 Financial Leasing Companies ............................................................................................................................. 4 1.2.6 Microfinance Institutions ..................................................................................................................................... 4 1.2.7 Social Security Schemes .................................................................................................................................... 5 CHAPTER TWO ........................................................................................................... 6 PERFORMANCE OF THE FINANCIAL SECTOR........................................................ 6 2.1 Banking Sector .......................................................................................................................... 6 2.1.1 Balance Sheet Structure ..................................................................................................................................... 6 2.1.2 Composition and Growth of Off-Balance Sheet Items ......................................................................................... 9 2.1.3 Financial Soundness Indicators ........................................................................................................................ 10 2.1.4 Digital Payment services .................................................................................................................................. 14 2.1.5 Financial System Stability ................................................................................................................................. 14 2.2 Other Supervised Institutions................................................................................................ 15 2.2.1 Credit Reference Operations ............................................................................................................................ 15 2.2.2 Bureaux De Change Operations ....................................................................................................................... 16 2.2.3 Financial Leasing.............................................................................................................................................. 16 2.2.4 Social Security Schemes .................................................................................................................................. 16 CHAPTER THREE ..................................................................................................... 18 SUPERVISORY ACTIVITIES AND OTHER DEVELOPMENTS ................................ 18 3.1 Licensing ................................................................................................................................. 18 3.2 Supervision.............................................................................................................................. 18 3.2.1 Banking Institutions .......................................................................................................................................... 18 3.2.2 Credit Reference Operations ............................................................................................................................ 19 3.2.3 Bureaux De Change ......................................................................................................................................... 19 3.2.4 Financial Leasing.............................................................................................................................................. 19 3.2.5 Social Security Schemes .................................................................................................................................. 19 3.3 Regulatory and Supervisory frameworks ............................................................................. 19 3.4 Establishment of Secured Transaction Law and Collateral Registry ................................ 21 3.5 Tanzania Bankers’ Association Code of Conduct ............................................................... 21 3.6 Capacity Building .................................................................................................................... 21 CHAPTER FOUR ....................................................................................................... 22 REGIONAL AND INTERNATIONAL COOPERATION .............................................. 22 4.1 The Monetary Affairs Committee Meetings .......................................................................... 22 4.2 Community of African Banking Supervisors ....................................................................... 23 4.3 Macroeconomic and Financial Management Institute of Eastern and Southern Africa .. 23 i 4.4 Supervisory Colleges ............................................................................................................. 23 4.5 ESAAMLG Meetings ............................................................................................................... 24 4.6 Mutual Evaluation Exercise ................................................................................................... 24 APPENDICES ............................................................................................................ 25 Appendix I: Directorate of Financial Sector Supervision Organization Structure ..................................... 25 Appendix II: Consolidated Balance Sheet of the Banking Sector ............................................................ 26 Appendix III: Consolidated Income Statement of the Banking Sector ...................................................... 27 Appendix IV: Geographical Distribution of Bank Agents .......................................................................... 28 Appendix V: Geographical Distribution of Branches and ATMs ............................................................... 29 Appendix VI: Directory of Supervised Institutions ..................................................................................... 30 Appendix VII: List of Audit Firms Registered to Audit Banks and Financial Institutions ........................... 31 Appendix VIII: Calendar of Major Events .................................................................................................. 32 LIST OF CHARTS AND TABLES CHARTS Chart 2.1: Asset Composition as at 31st December 2019 ............................................................................. 6 Chart 2.2: Growth of Major Components of Total Assets .............................................................................. 7 Chart 2.3: Liabilities Composition and Trend ................................................................................................. 8 Chart 2.4: Earnings Trend ........................................................................................................................... 13 Chart 2.5: Financial System Stability Index ................................................................................................. 15 TABLES Table 1.1: Categories of Banking Institutions ................................................................................................ 1 Table 1.2: Distribution of Branch Network ..................................................................................................... 2 Table