The determinants of banking sector performance in Tanzania: A pre-post Treasury Single Account analysis

Mkaro, Goodhope Hance; Lau, Lin Sea; Choong, Chee Keong

doi:10.1080/23322039.2023.2282812

Cited by 1 publication

(2 citation statements)

References 89 publications

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“…Ultimately, this withdrawal of Government Deposits impacts negatively on their lending ability since banks need deposits (liabilities) to provide Loans and Advances. The findings are in agreement with the findings of the studies done by (Kanu, 2016), (Muraina, 2018), (Mwambuli & Igoti, 2021), (Ajetunmobi, et al, 2017), (Ndubuaku, et al, 2017), and (Mkaro, et al, 2023) whose findings revealed that the TSA impacts negatively on the performance of the banking sector. These findings point to Commercial Banks' reliance on Government Deposits, to Mobilize Deposits and thus provide lending.…”

Section: Conclusion and Recommendations 61 Conclusionsupporting

confidence: 92%

“…This therefore means that, the TSA which essentially withdraws Government Deposits from Commercial Banks has a negative effect on their ability to mobilize deposits. The findings of this study are consistent with the findings by (Mkaro, et al, 2023) whose study revealed that the performance of some banks was impaired after TSA adoption, as a major portion of their deposits was derived from Government deposits. The findings of this study are consisted with studies by (Ndubuaku, Ohaegbu, & Nina, 2017), and (Oyadonghan & Atagboro, 2020) whose findings were that Treasury Single Account impacts negatively on the banking sector's ability to mobilize deposits.…”

Section: Commercial Bank Deposit Mobilizationsupporting

confidence: 92%

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A Study of the Effect of the Treasury Single Account on Commercial Banks Deposits and Lending in Zambia

Mulenga,

Chowa

2024

JEFMS

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The implementation of the Treasury Single Account (TSA) in Zambia brought about drastic changes in the management of public funds. The Bank of Zambia assumed custodianship of public funds while Commercial Banks remain revenue collection agents throughout the country. This study investigated the effect of the TSA on Commercial Banks Deposit Mobilization and Lending in Zambia. Secondary and Time series data were collected from the Bank of Zambia (BOZ) annual reports covering the pre- and post-TSA implementation eras, over a ten-year period (2010-2019). The independent variable was represented by Government Deposits (representing the TSA), while aggregate Commercial Banks Deposits and Loans and Advances were the dependent variables. The data were analysed using descriptive, regression and correlation analysis, with the aid of IBM SPSS Statistics version 28. The findings of the study revealed that Government Deposits have a significant positive effect on Commercial Banks Deposit Mobilization [(P-value 0.001; (CI: 95%)]. The study also revealed that Government Deposits have significant positive effect on Commercial Banks Loans and Advances [(P-value 0.001; (CI: 95%)]. The trend analysis on Government Deposits further revealed a slow growth in Government Deposits after TSA implementation compared to the pre-TSA period. The trend analysis on Loans and Advances also revealed a slower growth in Loans and Advances during the post –TSA era. The study therefore concluded that the TSA which aims to withdraw Government Deposits from Commercial Banks has a negative effect on Commercial Bank Deposits and their lending ability. The study recommended that banks should develop strategies to attract private sector deposits, to fill the void created by the implementation of the TSA. Banks should come up with innovative solutions to tap into the unbanked population. It is important that banks develop attractive savings products to encourage the culture of saving among citizens. The study further recommended that the Ministry of Finance should consider allowing Commercial Banks involved in revenue collection, a few days float before revenue is remitted to the main TSA account at Bank of Zambia (BOZ).

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