The Deposit Insurance Board (DIB) has paid TZS 9.07 billion in compensation to depositors of seven banks that were closed after becoming insolvent, a move aimed at restoring public trust in the country’s financial sector.
The compensation covers 75.76 percent of all eligible claims submitted by depositors as of March 2025.
Speaking during the 49th Dar es Salaam International Trade Fair (Sabasaba) on Thursday, the Director of the Deposit Insurance Board, Mr Isack Kihwili, said the payments were made to customers of FBME Bank, Covenant Bank, Kagera Farmers’ Cooperative Bank, Meru Community Bank, Mbinga Community Bank, Njombe Community Bank, and Efatha Bank.
“More than 75 percent of eligible compensation has already been paid. However, those who have not received their payments are mostly customers who have not submitted their claims,” said Mr Kihwili.
He urged depositors from the closed banks to visit the DIB offices or contact their representatives to file claims and access their compensation.
FBME Bank accounted for over 57 percent of disbursed claims, while Covenant Bank had 83.73 percent, Kagera Bank 94.06 percent, Meru Bank 92.35 percent, Mbinga Bank 84.66 percent, and Njombe Bank 87.26 percent and Efatha Bank.
The Deposit Insurance Board was established in 1991 and began operations in 1994 under the Bank of Tanzania. It now operates independently and plays a critical role in ensuring stability in the financial system.
By December 2024, DIB had accumulated capital worth TZS 1.3 trillion. The growth is attributed to an increase in the number of contributing banks and improvements in regulatory systems.
“We now have 42 contributing institutions (banks) registered with the Bank of Tanzania. Each contributes 0.15 percent of its annual deposit base to the fund,” Mr Kihwili said.
The maximum insurance coverage per depositor has also increased over time. Initially set at TZS 250,000, it was revised to TZS 1.5 million in 2010, and to TZS 7.5 million in 2023.
“This means that if a bank fails today, any depositor with up to TZS 7.5 million will be fully compensated. For amounts above that, DIB follows liquidation and recovery procedures in collaboration with other authorities,” Mr Kihwili explained.
Current data shows that 99.24 percent of depositors in the country are fully covered under the deposit insurance scheme. This exceeds the international benchmark of 90 percent, positioning Tanzania’s deposit protection framework among the strongest in the region.
“This level of protection strengthens public confidence in banks and supports broader efforts to deepen financial inclusion,” Mr Kihwili said.
However, he acknowledged some challenges, especially for banks that operate branches or partnerships outside Tanzania. He noted that differences in legal and financial frameworks across countries can complicate compensation procedures.
Mr Kihwili called on members of the public to visit the DIB pavilion at the trade fair to learn more about how the deposit insurance system works and the role it plays in protecting customers' savings.
“We encourage people to get informed. Understanding your financial safety net helps you make better banking decisions,” he added.