Retail Banking

Physical Channel Distribution

Elibariki Masuke
Financial landscape in Tanzania…..

37
Number of Banks
1,003
Number of Branches
88K
Number of Agents

Our
Market 5% 19%
share
Our market share on active digital users is still very low…

1,900
194
24% of ATMs are concentrated in just six

1.6mn
regions, with the following distribution:
596 ATMs (15%) in Dar – NBC( 71), 130
ATMs (3%) in Arusha- NBC (13), 90 ATMs
Number
Numberof
ofATM
NBC ATM (2%) in Mwanza- NBC (12), 88 ATMs (2%)
–NBC (8) in Morogoro, and 85 ATMs (2%)
As of 2022, active mobile banking in Dodoma- NBC(12)
user base across all banks stood at
1.6mio. Assuming a YoY growth rate
of 30%, now number should be
1,900 Between 2021 and 2022, the number
1.9mio, with our current active user of ATMs increased by 30%, rising from
All Banks ATMs
base of 150,000 this is 8% market 1.4K to 1.5K. Concurrently, the
share. transaction volume grew by 9%, from
53mio to 57mio. Consequently, the

391K number of transactions per ATM

decreased from 37,000 to 30,000.

8%
NBC Debit cards

9mio
International branded cards issued by
domestic banks increased by more
than 237 percent for the past five years
from 2.67 million cards to 9.01 million in
Industry Debit cards 2022 (BoT,2022)
Over the past five years, the number of active users and transactions
in mobile banking has doubled.

Historical data- mobile banking transactions Monthly usage frequency

92.1
Cross Boarder… 4%
71.5
Internet Banking 6%
55.7 59.2
45.7 QR 7%
POS 16%
Mobile Banking 22%
5.0 5.9 4.8 7.9
4.1
ATM 25%
2018 2019 2020 2021 2022
Mobile Money 52%
Number of Customers (In Mn)
Value of the transaction (in Mn)

“The 2022 survey by BOT revealed that mobile phones Most of the financial consumers favor using mobile
are widely recognized as a digital channel, scoring 97 money for transactions. From 2020 to 2022, the value of
percent. ATM usage followed closely behind at 89 money deposited via agents increased from 28 trn to
percent, while Internet banking ranked as the least 68trn, while the volume doubled from 41mn to 84mn.
recognized payment system channel.” Additionally, the value of withdrawals increased from 9
trillion to 21 trillion during the same period.
 • Trends indicate an increase in the
NBC ATM market share is 10% number of ATMs following a decline
observed between 2017 and 2018.
There has been a concerted effort to
increase ATM deployment in
regions outside of Dar es Salaam,

• Compared to the 2022 BOT data,

NBC's market share on ATMs stands
at 10%. Insights from BOT highlight
certain regions where the growth of
number of ATMs However, NBC has
the lowest market share, and this is
the areas we will concentrate.

• Retail Banking will conduct an

analysis to strategically position
ATMs in in Katavi, Njombe, Lindi,
Geita, Mtwara, and Kigoma.

• There regions are potential due to

high economic activities such as
agriculture, mining and natural
gas.
 Dar is still leading …...
Our analysis for the 2023 months shows that 77% of deposits are coming from Dar es salaam while
Mwanza (2%), Zanzibar (2%), Arusha (4%), Mbeya contributes 3%.
There are regions which are highly financially excluded
Retail Banking will increase footprint in six regions
which people stays 5km far from financial access
points. These regions which are Tabora, Rukwa,
Ruvuma, Katavi, Manyara and Singida holds 19% of
Tanzania Population

8.8m NBC Market share

Potential customers 8.8m

out of 8.8m people
who are financially
included is only 1%
(52,000 customers)
52K
NBC Active customers

The map above indicates the percentage of

people staying within 5km proximity of a financial
access point.
We will expand our network to regions which are highly excluded
How we will be reaching potential customers

1. Set a special team using a direct sales model and

nearby staff to onboard agents and onboard new
customers in all districts located regions which are
highly excluded to mobile new customers and deposits

2. Use marketing radio station allocated in these selected

regions to aggressive communicated about our value
offering specifically NBC shambani, NBC kua Nasi,
Akaunti ya Mwalimu and insurance products

3. Collaborate with SME to do conduct business club to

bridge financial literacy gap as well as to increase NBC
brand visibility as a tool to attract entrepreneurs

4. Open service centre in potential area in 2024 but in the

meantime to put a right focus on growing super agents
and normal agents.

5. Run regional Marketing campaigns which will only

target these and to use NBC premier league as a hook
to get new customers.
 • Given that 50% of Tanzania's
Tanzania Demography population is aged below 19 years, a
banking solution tailored to this
demographic could be a mobile-
based financial education and

70%
savings platform designed
specifically for young users.

• Young people are so much

50% Although a significant portion of tax interested in gamified solution and

revenue is currently generated in for us to be successfully we must
urban areas, it's essential to build solutions aligned to that angle
recognize that 70% of Tanzania's but solely focusing on financial
population resides in rural areas, literacy, savings goals, and
where banking activities are limited.
responsible spending habits,
However, this presents a significant
untapped potential for banking
services and financial inclusion • Our branch network must redefine
initiatives. the service and focus on offering
services for kids like peer-to-peer
50% of Tanzania's transfers and parental controls
population is aged could provide a safe and controlled
below 18 years environment for young users to
manage their finances and learn
valuable money management skills
from an early age.
 Barriers for youth to access financial services

Major constraints limiting access and use of financial services Retail will address these challenges via

Customer onboarding
• NBC has already simplified the process for customer onboarding
• Fee charged to customer are still reasonable.
• Continue with agents onboarding in areas which we don’t have presence

Loan processing
• Kua nasi product has bridged the gap, but TAT is still major challenge
• Short term loans offered digitally with flexible repayment.

What will push the dial

• Insurance solution which meets the needs of Youth and women.
• Innovative Guarantee schemes to mitigate NPL risk
• Purpose driven workshops to bridge the financial literacy gap

Key issues to be fixed

• Dormancy reactivation via self service channel (ATM, Agents and app)
• Self account opening
• Simplicity in our communication /- make It easy for customers to understand

Our assessment on drivers for financial inclusion

Source: Calculation based on field survey, 2022

Affordability Speed convenience

We will continue to invest on brick and Mortar

The approach

Services Center Branch Super Agent Normal Agents

Average initial cost for Average initial cost for Average initial cost for Average initial cost for
investment : Maximum TZS 120M. investment : Minimum TZS 120M. investment : Capital for this investment :
venture is 20M, its investment cost Capital for this venture is 2M, its
varies due to location and investment cost varies due to
structure modality which is agent interest, location and
roughly to 50M. capability.
Area size: Max 250m2 Area size: Min 250m2 Area size: Min 40 Sqm Area size: average/standard

Management structure:Service Management structure: Branch Management structure: Management structure: Reporting
center Supervisor Manager Reporting to Branch Manager to Branch Manager (Reporting to
(Reporting to Agency Banking RM). Agency Banking RM).

Services offered: Limited number Services offered: Unlimited Services offered: limited services Services offered: limited services
of banking services (Loans related number of banking services. (Provide leads to branches : Loans (normal transactions performed).
to CIB and BB are treated as related to BB,RB and CIB).
leads) -Perform normal transactions
-Insurance service offered directly.
-Float Management to normal
agents
Number of staffs: Maximum 5 Number of staffs: 8 -26 Number of staffs : Minimum 2 Number of staffs : Minimum 1
permanent staff permanent staffs.
New service centre holds a book balance of TZS 12Bn - within a year

52,664
13.5

10.1
Number
Numberof
ofATM
Customers
7.0 7.2

12
1.7 2.1
Number of Service centers

Q2,2023 Q4,2023
Liabilities Assets
Q1,2024
473K
Q1 , 2023 Q2, 2023 Q4,2023 Q1, 2024
Deposit per customers
Number of customers 384 5,626 18,090 28,564
Liabilities (TZS Bn) 0.1 1.7 7.0 13.5
Assets (TZS Bn)
Number of service centre
0.03
3
2.1
6
7.2
11
10.1
12
1.2Bn
Liability per service centre (Mn) 37 284 635 1,126 Deposit per service centre
2024 branch network plan – 15 service centers

Greater Dar Plan Agriculture Mining

We are going expands our customer In line with our strategy to expand To support FX deposits and revenue
in dar in below location for service Agribusiness targeting we will we will open service centre in the
centre expand open service centre in following location
• Bunju • Karagwe • Chunya
• Kariakoo, • Kyela and • Namanga
• Kivule • Mahenge • Katoro
• Morocco,
• Ubungo and
• Tabata

Trade
We have also identified town which
have high economic activities to
mobilize deposits
• Kasulu
• Korogwe
• Nzega
2024 branch network plan
No. Location District Economic activities Non-Tax revenue % of Non Tax revenue Population
1 Kariakoo Ilala Trade and Industry TZS 75.3Bn 8% 1,649,912
2 Tabata 1,649,912

3 Morocco Kinondoni Trade and Industry TZS 47.3Bn 5% 982,328

4 Bunju 1,086,912
5 Kivule Ubungo Trade and Industry TZS 27.8Bn 3% 982,328

6 Ubungo 385,744
7 Karagwe Trade Agric TZS 3.5Bn 0.4% 1,649,912

8 Namanga Longido Fx TZS 1.8Bn 0.2% 175,915

9 Kasulu Kasulu Fx TZS 2.6Bn 0.2% 238,321

10 Chunya Chunya Agriculture TZS 5.1Bn 0.5% 344,471

Mining
11 Kyela Kyela Agriculture TZS 3.9Bn 0.4% 266,426

12 Katoro Geita Mining TZS 5.1Bn 0.5% 1,035,214

13 Korogwe Korogwe Trade TZS 3.8Bn 0.4% 272,870

14 Mahenge Ulanga Fx and agriculture TZS 2.4Bn 0.2% 232,895

15 Nzega Nzega Trade TZS 3.0Bn 0.3% 574,498

Appendix
Mafinga Service Center Financials

16
Tandahimba Service Center Financials

17
Mbezi Chini Service Center Financials

18
Namanga Service Center Financials

19
K/Koo Service Center Financials

20
K/Koo Msimbazi Service Center Financials

21
Mbezi Louis Service Center Financials

22
Morocco Service Center Financials

23
Bunju Service Center Financials

2
Bunju Service Center Financials

2
Tabata Service Center Financials

2
Ubungo (EACLC) Service Center Financials

2
Usa river Service Center Financials

2
Tandika Service Center Financials

2
Kongowe Service Center Financials

2
Goba Service Center Financials

2
Kivule Service Center Financials

2
Mlowa Service Center Financials
Assumptions: Metrics
Customers in Target Population view 46,890
NBC Target (20%) in 5 years 9,378
Average monthly deposit 300,000
Expected Total New To Bank Deposit 20,555,675,000
Residual deposits (60%) 2,078,855,625
FTP 5.51%
Assumptions: Metrics
Average NFI per Customer per annum 24,000
Power&Network (259,715.13)
Marketing (333,333)
Rent (Building) 6,000,000
Atm lease under IFRS 16 2,652,612
Depreciation 2,433,589
interest 219,023
Intruder alarm Monthly 94,400
security Guards Private p.m 1,328,680
security Guards Police p.m 1,200,000

33
Chunya Service Center Financials

2
Kisesa Service Center Financials

2
Katoro Service Center Financials

36
2
Karagwe Service Center Financials

37
Bunda Service Center Financials

38
Korogwe Service Center Financials

2
Boma Service Center Financials
Assumptions: Metrics
Customers in Target Population view 62,572
NBC Target (20%) in 5 years 12,514
Average monthly deposit 300,000
Expected Total New To Bank Deposit 19,968,370,000
Residual deposits (60%) 2,019,459,750
FTP 5.51%
Assumptions: Metrics
Average NFI per Customer per annum 25,200
Power&Network (259,715.13)
Marketing (333,333)
Rent (Building) 6,000,000
Atm lease under IFRS 16 2,652,612
Depreciation 2,433,589
interest 219,023
Intruder alarm Monthly 94,400
security Guards Private p.m 1,328,680
security Guards Police p.m 1,200,000

2
Kasulu Service Center Financials

2
Kyela Service Center Financials
Assumptions: Metrics
Customers in Target Population view 166,426
NBC Target (20%) in 5 years 33,285
Average monthly deposit 300,000
Expected Total New To Bank Deposit 21,730,285,000
Residual deposits (60%) 2,197,647,375
FTP 5.51%
Assumptions: Metrics
Average NFI per Customer per annum 26,400
Power&Network (259,715.13)
Marketing (333,333)
Rent (Building) 6,000,000
Atm lease under IFRS 16 2,652,612
Depreciation 2,433,589
interest 219,023
Intruder alarm Monthly 94,400
security Guards Private p.m 1,328,680
security Guards Police p.m 1,200,000

2
NBC PHYSICAL CHANNEL DISTRIBUTION PER REGION
ASANTE