Tanzania Agricultural Development Bank (TADB) achieved an impressive financial performance during the third quarter of this year after posting a pre-tax profit amounting to TZS 4.88 billion, an increase of 28 percent, compared to TZS 3.81 billion recorded in the same period in 2022.
According to the TADB Finance Director Dr. Kaanaeli Nnko, the growth in pre-tax profit was underpinned by substantial increase of interest and non interest incomes.
He noted that TADB posted a 26 per cent year-on-year increase in net interest income, which climbed from TZS 8.66 billion to TZS 10.94 billion in Q3, 2023, driven by the expansion of lending activities within the agricultural sector and the effective management of interest-earning assets.
“Non-interest income also experienced a commendable surge, totalling TZS 1.52 billion in Q3, 2023, marking an 18 percent increase compared to the corresponding period in 2022. The growing lending activities played a pivotal role in the impressive 18 percent growth of non-interest income in Q3,’ said the Finance Director.
According to Dr Nnko, on a year-to-date basis, the bank’s PBT reached TZS 12.34 billion, underscoring its financial efficiency within the ever-evolving financial landscape. This achievement highlights TADB’s ability to generate sustainable profits while steadfastly adhering to its core mission of bolstering the agricultural sector.
“Loans and advances surged by an impressive TZS 94.7 billion (a 36% increase) this year, reaching a total of TZS 358.56 billion by the end of Q3.
This surge solidifies the bank’s unwavering commitment to providing vital financial support to farmers, agribusinesses, and various stakeholders across Tanzania,” he elaborated.
“A remarkable improvement can be observed in asset quality, with the Non-Performing Loan (NPL) ratio in the third quarter of 2023 improving to 4.58 percent, a positive trend compared to the 5.47 percent reported in Q2, 2023. This figure comfortably falls below the Bank of Tanzania’s threshold of 5%, underscoring TADB’s robust risk management practices and its solid financial standing. This achievement reflects a healthy expansion of lending activities while maintaining favourable asset quality,” he added.
TADB’s operational expenses for Q3, 2023, amounted to TZS 5.60 billion, representing 37 percent increase from the TZS 4.09 billion recorded in the same period in 2022. These figures reflect the bank’s continuous investment in enhancing its capabilities and services.
TADB’s most outstanding milestone is the substantial growth in its total assets, now surpassing half a trillion Tanzanian Shillings, reaching TZS 535.25 billion. This significant growth not only strengthens the bank’s capacity to support the agricultural sector but also solidifies its position as a prominent player in the financial market.
Speaking to journalists, TADB’s Ag. Director of Credit and Business, Afia Sigge, said that in the third Quarter of the Year (Q3) of 2023 a total of TZS 61,883,235,022 were issued as loans in the crop, livestock and fishing sectors in the country.
“Of the TZS 61 billion disbursed to farmers, TZS 40,236,677,059.00 was disbursed for the purchase of inputs and costs of agricultural operations. TZS 19,236,098,697 was borrowed for the cost of construction of agricultural projects. TZS 1,219,430,145 were borrowed from irrigation projects, while TZS 1,191,029,121 was borrowed for the purpose of purchasing livestock, modern agricultural materials and warehouse construction,” said Sigge.
On his part, George Nyamrunda who is the Agency Fund Manager for the Smallholder Credit Guarantee Scheme (SCGS), one of TADB’s flagship initiatives, said the credit facility continues to make substantial progress.
“The bank’s collaboration with 16 Participating Financial Institutions (PFIs) has extended its reach to beneficiaries in 27 regions and 127 districts, with a total disbursement of TZS 228.26 billion. These results vividly illustrate the positive impact of this initiative on smallholder farmers and agricultural entrepreneurs nationwide, he said.