4 THE COMMUNITY BANK MODEL OF INTERNATIONAL PHILANTHROPY

Learning outcomes The case introduces student to basic understanding of banking sector in Tanzania as well as the strategies and struggle to raise capital through shareholders’ funds. Application of Banking theory and Pecking order theory is evidenced from the case. The case outlines why the bank struggled to raise capital and what triggers the capital raising strategies. It also give students an opportunity to think about applicable theories of capital structure and bank capital, and strategies the bank could use to rescue its capital crunch in the future. Case overview/synopsis The case provides details of how the Capital Community Bank (CCB) raised its capital through strategic financial engineering which enabled it to raise the minimum regulatory capital required to be licensed as a financial institution unit, to a regional financial institution, to a fully fledged commercial bank. The bank started with a paid up capital of TZS 472.3m in 2002, involving four Local Government Authorities and individual investors. Capital raised to TZS 31.3bn in 2014 and down to TZS 20.6bn at the end of 2016. The minimum regulatory capital required is TZS 15bn, while paid up capital was 16.9bn. With the change of the management team in 2017, the bank is looking for avenues to raise further capital to meet the regulatory limits and continue to survive as a commercial bank, given dramatic changes in the banking sector in Tanzania. Complexity academic level The case is suitable for third year students in Bachelor of Commerce/Economics specializing in banking/financial services. It also suits postgraduate/master's students seeking a Postgraduate Diploma or Master of Business Administration in financial institutions/banking course. Supplementary materials Teaching Notes are available for educators only. Please contact your library to gain login details or email [email protected] to request teaching notes. Subject code CSS 1: Accounting and Finance.

Download Full-text

Does scale matter in community bank performance? Evidence obtained by applying several new measures of performance

Journal of Banking & Finance ◽

10.1016/j.jbankfin.2019.07.005 ◽

2019 ◽

Vol 106 ◽

pp. 471-499 ◽

Cited By ~ 2

Author(s):

Joseph P. Hughes ◽

Julapa Jagtiani ◽

Loretta J. Mester ◽

Choon-Geol Moon

Keyword(s):

Bank Performance ◽

Community Bank ◽

Measures Of Performance

Download Full-text

Community Bank System, Inc.

Mergent s Dividend Achievers ◽

10.1002/div.1102 ◽

2004 ◽

Vol 1 (3) ◽

pp. 70-70

Keyword(s):

Community Bank ◽

Bank System

Download Full-text

Realising Value from Absorptive Capacity

Journal of Information & Knowledge Management ◽

10.1142/s0219649218500119 ◽

2018 ◽

Vol 17 (01) ◽

pp. 1850011

Author(s):

Ronald Eastburn

Keyword(s):

Absorptive Capacity ◽

Dimensional Structure ◽

Community Banks ◽

Innovative Performance ◽

Future Studies ◽

Community Bank ◽

Knowledge Based ◽

Formal Mechanism ◽

Improved Performance ◽

Insight Into

To gain insight into how successful community banks are continuously “adaptive” to environmental challenges, we examined the role absorptive capacity (ACAP) plays in effecting improved performance. ACAP is the formal mechanism used for sensing and experimentation of knowledge — and as such is adopted to acquire, assimilate, transform and exploit knowledge so as to positively influence performance. Data obtained from a survey of 151 community bank CEOs confirmed that ACAP does indeed enhance performance. We also demonstrated the multi-dimensional structure of ACAP, the consequence of cultivating an active learning orientation and the relevance of potential cultural inhibitors on decision behaviour for innovative performance. Several directions for future studies utilising knowledge-based responses are proposed.

Download Full-text