A Report Submitted in Partial Fulfillment of the Requirements of the Award of
Masters of Business Administration in Corporate Management Degree (MBA-CM)
of Mzumbe University
This Dissertation studied what was perceived to be the current problem facing the
banking sector today following the unsatisfactory performance for the past three
years (2015-2017).Many have been said regarding the poor performance of the
banking sector. Hence, this study examines the cause of the problem.
The study used Questionnaires and interview methods to arrive to the conclusion.
Case study research design was used where CRDB and NMB Banks were selected
as our sample study.50 respondents were obtained using purposive and simple
random sampling techniques. 10 key respondents were interviewed to get their
perceptions on the banking sector's performance. The secondary data collected
confirmed our prior suspicious of the problem under study.
The findings indicated that poor performance of the banking was the result of
introduction of new government policies and regulations found in the Banking and
financial institutions Act,2014 and adoption of the international banking standards
such as Basel I,II and III . Some of policies introduced by the fifth government of
Tanzania such the tight spending, verification of civil servants, transfer of funds to
BoT, squeeze of the money supply and government intervention in cash crops
business were also factors for poor performance.
The results have shown that the Non-performing loans(NPLs) had a negative
impact on the performance of the banking sector. This was the result of compliance
with some regulations that shall be discussed in details later. The results have also
shown that both capital adequacy and liquidity positions of the banks were affected
following the decision of the government to transfer funds to BoT and the tight
spending policy. Some Banks especially NMB was affected by the decision of the
government to remove the civil servants with fake certificates. The squeeze of
Money supply in the economy had a great impact in the banking sector.