Although the 1990s saw the liberalization of the banking sector, which encouraged expansion and competition among lenders, recent economic changes have presented certain banks with capital issues. Despite the presence of a sizable number of rival lenders, a small number of banks monopolize the majority of the industry.

For instance, the top six banks, which had a larger network of branches, agency banking, and Internet financial services, dominated the banking industry deposits. According to the central bank, which regularly monitors the situation to identify and reduce any potential systemic risks, these banks accounted for 65.4% of all deposits.

The number of financial institutions, according to bankers and economists, may be good for competition, but Tanzania needs stronger financial institutions that can match the market’s demands. “Consolidation in the banking industry is actually a very good idea to form strong and well-capitalized institutions,” said Tanzania Commercial Bank (TCB) managing director Sabasaba Moshingi.