Linking with Savings and Credit Cooperatives (SACCOs) to Expand Financial Access in Rural Areas: A Case Study of CRDB Bank in Tanzania

This case study reviews Tanzanias fifth largest commercial bank, CRDB Bank and its efforts to bring about positive change in the lives of Tanzanians alienated from the commercial banking sector. The case discusses CRDBs strategy of linking with Savings and Credit Cooperatives (SACCOs) in order to extend outreach of financial services to rural areas in a cost effective way. Apart from demonstrating its corporate social responsibility, the linkage model will also help the bank deal with saturated urban market conditions in the future. Highlighting the importance of rural finance in Tanzania and the main constraints to its provision, the case draws the following lessons as key requirements to the models success:

• Management that is willing and committed to enter the lower income market;
• Well-managed initiative with a strong commercial focus and several guarantees built into the system at different levels;
• Ability to make large upfront investment into the model and long term vision to see it through;
• Complementary initiatives and capacity building at the SACCOs;
• Enabling legal and regulatory framework for the linkage model to work.