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An Exclusive Interview

Dr. Ibrahim Mwangalaba, the founding Managing Director - Maendeleo Bank

A few weeks ago, I found myself wandering along the pristine shores of Coco Beach. The rhythmic sound of waves crashing was interrupted by the distant thud of running shoes against the road’s concrete terrain. As the sound grew nearer, I saw a sea of marathon runners, their energy visible and determination evident in their strides. However, what caught my eye were their white and purple jerseys, all decorated with the words ‘Maendeleo Bank Marathon – Hatua ya Faraja’.

The buzz around the marathon grew as the day progressed, and the media covered the event. It turns out Maendeleo Bank was celebrating its tenth anniversary, and the event was blessed by the presence of a special guest – the Prime Minister, Hon Kasim Majaliwa Majaliwa.

Intrigued by this display of corporate responsibility and community engagement, I contacted Maendeleo Bank. A few emails and phone calls later, I found myself in the bank’s offices, seated across from the Founding Managing Director. As we get into conversation, the story of Maendeleo Bank began to unfold, revealing a narrative of vision, resilience, and community spirit.

Section 1:

The Humble Beginnings

Sitting across from Dr Ibrahim Mwangalaba, the Founding Managing Director of Maendeleo Bank, one is immediately struck by his demeanour. His face, serious yet approachable, is framed by a shortly trimmed silver beard, evidence of years of wisdom and experience. But behind those eyes lies a story of humble beginnings, of a Tanzanian village boy who dared to dream big.

"I was born in the village, raised in the village, and studied my primary level [education] in the village," he began, his voice filled with pride and nostalgia. "I lived the life of a full Tanzanian, and I am so proud of my background." He fondly recalled the values his parents instilled in him, emphasising honesty, integrity, and commitment. "My parents were so strict to ensure that I remain the child whom they wanted to be," he shared.

His journey in the banking world began at CRDB, where he started as a junior. "I worked for over seven years at CRDB," he said, reflecting on the foundational years of his career. Here, he learned the intricacies of managing operations and became one of the key trainers in the bank. "I was one of the key trainers of the bank on operations and control," he mentioned, a hint of pride evident in his voice.

His career trajectory significantly changed when he moved to Kenya Commercial Bank (KCB). "With Kenya Commercial Bank, I moved and joined the Head of Operations and ICT," he elaborated. But more than the roles and responsibilities, the mentorship he received from his former boss at CRDB Bank truly shaped his career. "I should not leave out mentioning my mentor... Dr Joseph Witts, who is now retired. He mentored me a lot. As of date, we are still in connection," he said, gratitude evident in his tone.

From a village boy tending to cattle to a banker shaping the financial landscape of Tanzania, the journey of Dr Ibrahim Mwangalaba, Maendeleo Bank's MD, is nothing short of inspirational. His story is evidence of the power of perseverance, mentorship, and staying true to one's roots.

Section 2:

The Birth of Maendeleo Bank

The story of Maendeleo Bank is intertwined with a vision, not of corporate giants or financial moguls, but of a church. The Evangelical Lutheran Church in Tanzania (ELCT) – Eastern and Coastal Diocese had a dream that transcended spiritual guidance; they sought to uplift their community in tangible, impactful ways.

"The genesis of the bank's formation from the church was to see how best the church can help the community raise their financial needs," the CEO explained, his voice reflecting the deep respect he holds for this vision. He painted a vivid picture of a community approaching the church, seeking financial support for various needs, from school fees to small business capital. "The church was approached by a number of people in the community... the church could not have the capability to support them by giving cash," he shared.

But instead of turning away, the church leadership brainstormed a solution. “They came with the idea of consolidating the muscles within the church, from the people who have and those who don’t have,” he said. I couldn’t hold myself; I joked about the ELCT being the Robinhood of the churches. However, unlike Robinhood, the church did not steal from those who had; instead, it pooled resources to create a revolving fund, offering loans with affordable terms to those in need, ensuring the fund’s sustainability. The CEO’s eyes lit up as he reminisced deeper into the bank’s inception. “They formed the committee in 2008 to establish this bank. That’s the origination of the idea to start the bank,” he said, emphasising the church’s proactive approach.

Section 3:

Raising Capital – Maendeleo Bank’s Unique Approach

In banking, capital is the lifeblood that fuels growth and operations. For Maendeleo Bank, the challenge of raising capital was a significant one. But as with every obstacle they faced, the bank, backed by the church, approached it with innovation and community at its heart.

"The church leadership thought on how best they can support this community," the MD began, leaning forward as if sharing a well-guarded secret. "So they came up with the idea of consolidating the muscles within the church, from the people who have and the people who don’t have." It was a unique approach, pooling resources from the church community to create a fund that would benefit the needy.

He dived into the specifics, explaining how they established share pricing to make it accessible. “One share equals five hundred shillings, and the minimum share ownership should be a hundred shares,” he detailed. This strategy ensured that “everybody in the church could manage to own a piece of the shares within the bank.” The MD’s face lit up with pride as he recounted the success of this endeavour. “By the end of 2012, they managed to collect about 3 billion shillings,” he said, a hint of triumph in his voice. This was more than enough to set up Maendeleo Bank as a regional entity.

Maendeleo Bank's approach to raising capital was about more than just numbers and finances. It was about community, trust, and a shared vision. It was about a church and its members coming together, pooling their resources, and creating an institution that would serve the greater good.

Section 4:

Navigating Regulatory Landscape

Every ambitious venture faces its share of challenges, and for Maendeleo Bank, the regulatory landscape proved to be a complex maze. The transition from a Limited Company to a Public Limited Company (PLC) was a significant leap that brought a slew of regulatory requirements and interactions with formidable institutions like the Central Bank and the Capital Market and Security Authority.

With his characteristic blend of seriousness and determination, the MD delved into this chapter of the bank's journey. "When we started, we were a limited company. But following the Company Law, the maximum shareholders for a Limited Company is 50, however, Maendeleo Bank had over 3,000 Shareholders hence needed to transition to a PLC," he explained. This wasn't just a matter of changing the company's status; it involved ensuring that the bank met all the stringent requirements set by the regulatory bodies.

Transition to a Public Limited Company (PLC):

The genesis of Maendeleo Bank was rooted in community service, with the church in Tanzania as its founder. However, before it opened its doors, it faced a pivotal challenge. “The regulatory requirement for the limited company formation is by shareholders, minimum two, maximum 50. By then, the [Bank’s] shareholders were over 3,000,” the CEO explained. This exceeded the regulatory limit for a limited company, prompting the Central Bank to advise the church to transition to a public limited company (PLC) through Capital Market and Securities Authority regulatory framework. “That’s where the idea of forming a PLC came out,” the CEO shared.

Regulatory Hurdles

Transitioning to a PLC meant engaging with multiple regulatory bodies. The bank had to liaise with the Capital Market and Security Authority to understand the nuances of setting up a PLC. “In 2013, the Capital Market and Security Authority approved the establishment of, Maendeleo Bank PLC,” the CEO recounted. This was followed by obtaining clearance from the Central Bank of Tanzania, ensuring compliance with the regulatory requirements of both entities.

Historic Listing on the Dar es Salaam Stock Exchange

Maendeleo Bank's journey took a historic turn when it became the first company in Tanzania to be listed on the Dar es Salaam stock exchange upon inception through Enterprise Growth Market (EGM) window. "We were the first company to be registered or rather to be listed at the capital market or rather the Dar es Salaam stock exchange on its inception," the CEO proudly stated. This was a significant achievement, given that typically, a company needs a working history of at least three years, with profitable years, to be listed. The bank's listing was evidence of its robust business model and the confidence of the regulatory bodies in its potential.

Section 5:

Strategy & Milestones - A Decade of Achievements

In the competitive banking world, a clear strategy and vision are paramount. For Maendeleo Bank, the past decade has been marked by strategic decisions, innovative product offerings, and significant milestones that have solidified its position in Tanzania's banking sector.

"Our bank's strategic position has passed through three stages," the CEO began, outlining the bank's journey. The initial strategic plan, spanning from 2014 to 2018, set ambitious targets: "We aimed to be profitable in a third year of operations, i.e. 2016; however, we became profitable in 2015, two years ahead of our projections." the CEO proudly stated, "Most of these strategic milestones were achieved before 2017.

The bank’s achievements continued further. “As we celebrate the ten-year anniversary, we’ve seen our capital grow from the initial TZS 4.5 billion to now TZS 17 billion. Our deposits have surged from TZS 3.5 billion in 2013 to TZS 81 billion, and our total assets have reached a commendable TZS 114 billion,” the CEO shared, his voice filled with pride.

Innovation has been at the heart of Maendeleo Bank’s strategy. “In 2017, we introduced unique products like poultry financing and in 2021 we introduced Wezesha Machinga product, which remains unparalleled in the market,” he highlighted. Embracing the digital transformation, the bank launched products tailored to the needs of its diverse customer base, ensuring convenience and accessibility. “Our customers, whether in Bukoba or Tanga, can open accounts with us and choose their saving modality through Timiza Vikoba product. They can start borrowing after saving for just three weeks, showcasing our commitment to flexibility and customer-centricity,” he elaborated.

The CEO also touched upon the bank’s contribution to the Tanzanian economy. “Since 2013, we’ve issued loans totalling 230 billion to over 43,000 borrowers. Of this, about 76 billion was directed towards SMEs while TZS 41 billion to micro-enterprises, reflecting our commitment to supporting grassroots businesses and fueling economic growth.”

Reflecting on the past decade, the story of Maendeleo Bank is one of strategic foresight, unwavering commitment, and a relentless pursuit of excellence. It's a tale of a bank that set ambitious goals, achieved them, and then set even loftier ones, always with an eye on serving its community and contributing to Tanzania's growth.

Section 6:

A Decade of Growth and Challenges

As the sun sets over the Tanzanian horizon, casting a golden hue over the bustling streets, Maendeleo Bank stands tall, evidence of a decade of growth, resilience, and transformation. But as the MD candidly shared, this journey had its fair share of challenges.

"Gaining market confidence was our first hurdle," he began, his fingers intertwined as he reflected on the bank's early days. "When you're new in the market, especially in the banking sector, trust is everything. And trust is earned, not given." Competing with established banks, some with decades of presence and brand recognition, was no small feat. "These banks had history, a vast network, and deep pockets. We were the new kid on the block, with just one branch to our name."

The limitations of being a single-branch bank were palpable. “Customers want convenience. They want to access their funds, conduct transactions, and seek services without travelling miles,” he explained. The MD recalled instances where potential customers hesitated to open accounts, concerned about the bank’s reach and accessibility.

But in these challenges, Maendeleo Bank saw opportunities. “We focused on our strengths,” he said with a determined glint in his eyes. “Our connection with the community, our understanding of their needs, and our commitment to personalised service.” The bank invested in training its staff, ensuring that every customer felt valued and heard. “We might have had one branch, but our service was second to none,” he stated proudly. Over the years, as the bank expanded its footprint, added more branches, and embraced digital banking, the initial challenges became stepping stones to success. “Every challenge taught us something. Every setback was a lesson,” the MD shared, his voice filled with gratitude and wisdom.

Section 7:

Navigating Business Dynamics - Lending and Managing Risks

Banks play a pivotal role as custodians of wealth and enablers of dreams and aspirations. Maendeleo Bank, with its deep-rooted commitment to the community, has always been at the forefront of this mission. However, the dynamic business environment presents its own challenges, especially when it comes to lending and managing risks.

"Lending is the lifeblood of any bank," the MD began, his tone contemplative. "It's how we support businesses, empower entrepreneurs, and fuel economic growth." However, lending decisions are fraught with complexities in a rapidly changing business environment. "The Tanzanian market is vibrant, diverse, and ever-evolving. Assessing creditworthiness, understanding business models, and predicting market trends is a delicate balancing act," he explained.

One of the significant challenges the bank grappled with was non-performing loans (NPLs). “No bank is immune to NPLs,” the MD admitted, his expression sombre. “They are a reflection of the market’s volatility and the inherent risks of lending.” He delved into the intricacies of managing these loans, from early detection systems to restructuring strategies. “Our focus has always been on proactive management. We invest in robust monitoring systems, regular portfolio reviews, and continuous engagement with our clients.”

The MD emphasised the importance of understanding the root causes of non-performing loans. “Sometimes, it’s external factors like market downturns or policy changes. At other times, it’s business-specific challenges,” he shared. By understanding these nuances, Maendeleo Bank could tailor its interventions, from offering financial advice to restructuring loan terms. But beyond the numbers and strategies, the MD’s perspective on lending was deeply human-centric. “At the end of the day, behind every loan is a dream, a vision, a family,” he said, his voice filled with empathy. “Our role is to support these dreams while ensuring the bank’s sustainability.”

In the intricate dance of business dynamics, Maendeleo Bank's journey is evidence of its resilience, adaptability, and unwavering commitment to its customers. It's a story of navigating challenges with foresight, empathy, and a deep sense of responsibility.

Section 8:

The Evolution of Banking - Embracing the Digital Age

Over the past decade, the shift from traditional banking methods to the demands of digital banking has been profound. Maendeleo Bank, with its roots deeply embedded in community values, found itself at the crossroads of tradition and innovation.

"The banking landscape has changed dramatically," the MD mused, his gaze distant as he pondered the transformation. "When we began, banking was about brick-and-mortar branches, face-to-face interactions, and paper transactions." He reminisced about the days customers would walk into the bank, be greeted by familiar faces, and conduct their transactions over the counter.

But as technology advanced, so did customer expectations. “People started seeking convenience,” he explained. “They wanted to bank on the go, anytime, anywhere.” The rise of smartphones, mobile apps, and online platforms heralded a new era for Maendeleo Bank. “We had to adapt, and quickly,” he emphasised.

The transition to digital banking was challenging. “Introducing new technologies meant training our staff, ensuring our systems were secure, and most importantly, gaining the trust of our customers in this new medium,” he shared. The MD recalled instances where customers, especially those accustomed to traditional banking, were hesitant about digital platforms, fearing security breaches or technical glitches.

Yet, Maendeleo Bank rose to the occasion. “We invested heavily in technology, ensuring our platforms were user-friendly and secure,” he said. The bank also launched awareness campaigns, educating customers about the benefits and safety of digital banking.

But the evolution didn’t stop there. “Banking is not just about transactions; it’s about understanding and meeting ever-changing customer needs,” the MD stated. Maendeleo Bank continually strived to stay ahead of the curve, from personalised loan offers to tailored financial advice.

Ultimately, the bank’s journey from traditional to digital reflects its customer commitment. “We evolve because our customers evolve,” the MD concluded, a smile playing on his lips. “And as they grow, we grow with them.”

Section 9:

Community Engagement - Beyond Banking

Maendeleo Bank's commitment to its community extends far beyond its banking services. With a deep-rooted corporate social responsibility (CSR) ethos, the bank has consistently engaged in initiatives that uplift, support, and empower the Tanzanian community.

CSR Initiatives:

The bank's CSR policy is evidence of its dedication to giving back. "We have a corporate and social security policy which addresses how the bank will turn to community service," the MD shared. Over the past decade, Maendeleo Bank has returned over 240 million to the community, focusing on health, education, and supporting those living in hardship, including orphanages. "For the past ten years, we have managed now to return back to the community over 240 million," the MD proudly stated.

Maendeleo Marathon:

In a display of community spirit and unity, the bank organised its first-ever marathon in September 2023. “That was our first marathon ever… we expected to have almost 3,000 people to participate, and eventually we had 4,800 people who participated,” the MD recounted. The marathon wasn’t just a sporting event; it was a cause. The aim was to raise funds to support people living with autism and to renovate their facilities. Additionally, the bank sought to assist premature babies at the KCMC Moshi Hospital by purchasing specialised equipment. The Prime Minister graced the event, further solidifying the bank’s reputation and commitment to community initiatives.

Maendeleo Bank Choir:

In a harmonious blend of banking and art, the bank boasts a choir comprising its staff. “Their primary objective is to offer banking services… those you saw there is the extracurricular,” the MD explained. This choir, formed out of love and pride for the bank, trained diligently, showcasing their talents and representing them in various events. “They were not paid, no allowance… they are coming here, gathering here to train for two months consecutively,” the MD shared, emphasising the staff’s dedication.

Football and Other Engagements:

The bank’s engagement with the community is wider than marathons and choirs. They also have a football team ready to play for the bank and engage with the community through sports. These engagements are evidence of the bank’s holistic approach to community involvement beyond traditional banking services. Maendeleo Bank’s community engagement initiatives paint a picture of a bank deeply intertwined with its community’s fabric. Whether through marathons, choirs, or CSR initiatives, the bank continually strives to make a positive impact, embodying its name ‘Maendeleo’, which translates to ‘progress’ or ‘development’.

Section 10:

Looking Ahead - Vision and Aspirations for the Future

With a decade of achievements under its belt, the bank is poised to embark on new ventures, adapt to emerging trends, and continue its legacy of community service.

"Our bank's strategic position has passed through three stages," the MD shared, reflecting on the bank's evolution. The initial strategic plan, from 2014 to 2018, laid the foundation. By 2017, the bank had surpassed most of its milestones, making it necessary to prepare a new five-year strategic plan, 2017 to 2021, which was even more ambitious. "Our aim was to grow from a regional bank to a national bank," the MD stated.

We are now in third tenure of strategic plan, 2022 to 2026 where the bank has set four strategic pillars which are; Transformational business growth – with objective to increase profitability hence creating value to Shareholders by extracting microfinance potentials, leveraging on technology where digitalization is a key agenda, Customer service transformation and improving governance and risk management.

This vision was not just about expanding the bank’s physical presence but also about deepening its impact. “We established an agribusiness window in 2015, which received tremendous feedback. Our goal was to expand this to different parts of the country, making it a key product offering.” As the bank celebrates its ten-year anniversary, the achievements are evident. “From a capital of TZS 4.5 billion, we’ve grown to TZS 17 billion. Our deposits surged from TZS 3.5 billion in 2013 to TZS 81 billion, and our total assets now stand at a commendable TZS 114 billion,” the MD shared with evident pride.

But what does the future hold for Maendeleo Bank? “As we set our milestones for the next five years, and eventually the next decade, our focus remains on serving our community,” the MD emphasised. The bank is eyeing a national presence by 2024, aiming to open branches in all capital cities. “We also aim to fully utilise digital banking, ensuring we capture a significant number of customers through this medium.” Furthermore, the bank’s vision extends beyond traditional banking. “We’re looking at establishing a fully-fledged insurance company in the coming years,” the MD revealed, highlighting the bank’s diversification plans.

A Journey of Faith, Vision, and Resilience

From the humble corridors of a church's vision to the bustling epicentre of Tanzania's banking sector, Maendeleo Bank's journey is nothing short of inspirational. Born out of a desire to uplift and empower the community, the bank has grown in size, reach, impact, and influence. At the helm of this transformative journey stands the MD, a beacon of leadership whose personal story mirrors that of the bank itself. From a Tanzanian village to the boardrooms of banking institutions, his trajectory is evidence of the power of dreams, determination, and dedication. Under his stewardship, Maendeleo Bank has navigated challenges, seized opportunities, and set benchmarks. But beyond the numbers, strategies, and milestones lies the heart of Maendeleo Bank - its values. Rooted in honesty, integrity, and commitment, the bank's ethos reflects the church's teachings that founded it. These values, coupled with a relentless drive for excellence, have propelled the bank to its current stature. As we reflect on Maendeleo Bank's story, it's evident that it's more than just a bank. It's a symbol of hope, progress, and community spirit. It's evidence of what can be achieved when vision, leadership, and values converge. And as the bank looks to the future, one thing is sure: its journey has only just begun, and the best is yet to come.