Dar es Salaam - Yetu Microfinance Bank Plc, a microfinance lender in Tanzania, has been placed under statutory administration by the Bank of Tanzania (BoT) due to its failure to meet regulatory requirements regarding liquidity and capital adequacy. The central bank took action on December 12, 2022, and suspended the bank's normal business operations for a period of three months to allow the BoT to assess the situation and determine the most appropriate resolution option.
The BoT emphasized that allowing Yetu Microfinance Bank Plc to continue operating while facing liquidity shortages and being undercapitalized would not be in the best interests of depositors and could pose systemic risks to the stability of the financial system. The decision to place the bank under administration is aimed at safeguarding the interests of depositors and maintaining the overall stability of the banking sector.
During this period of administration, which started on December 12, 2022, Yetu Microfinance Bank Plc will not be open for regular banking activities. The Bank of Tanzania will utilize this time to evaluate the situation and identify the most suitable course of action.
The BoT has now completed the process of determining the resolution option for Yetu Microfinance Bank Plc in accordance with its mandate under Section 59 (4) of the Banking and Financial Institutions Act of 2006. The decision has been made to transfer the bank's assets and liabilities to an existing institution, with NMB Bank Plc being selected as the recipient. This formal resolution option will come into effect on May 24, 2023.
By invoking the powers granted in Section 58(2) (h) of the Banking and Financial Institutions Act of 2006, the Bank of Tanzania has legally transferred all the assets and liabilities of Yetu Microfinance Bank Plc to NMB Bank Plc through an acquisition process. Depositors and other creditors of Yetu Microfinance Bank Plc will receive further communication from the authorities regarding how and when they can access banking services through NMB Bank Plc.
It is crucial for all borrowers of Yetu Microfinance Bank Plc to continue meeting their financial obligations in line with the terms and conditions specified in their agreements during this transitional period.
The Bank of Tanzania reiterates its commitment to protecting the interests of depositors and creditors while ensuring the stability of the banking sector. The resolution process aims to find a suitable solution to the regulatory challenges faced by Yetu Microfinance Bank Plc and maintain the overall health of the financial system.
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