China Dasheng Bank Limited (CDBL) has become the latest bank to provide letters of credit (L/Cs), guarantees and other trade finance services in Tanzania and beyond.

The Chinese government-owned fully-fledged commercial bank says it will serve public and private businesses from a base in the Tanzanian commercial centre of Dar es Salaam from where it will service firms throughout the East African Community.

Banking licence

The Bank of Tanzania, the country's central bank and financial services regulator, issued the Chinese financial institution a licence to operate on 8 November.

There are a large number of Chinese enterprises in Tanzania, including government and private enterprises.

Remnimbi plans

The bank's chairman Ji Jiaqin said CDBL has plans "to become the remnimbi (RMB) clearing and settlement centre in Tanzania and reduce exchange losses in trading between the two currencies."

The new bank is expected to facilitate China - Tanzania trade relations. In 2016, Tanzanian exports to China totalled US$354 million, a figure dwarfed by Tanzanian imports from China of US$1.6 billion. Chinese investment in Tanzania reached US$4 billion in 2016.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.