Bank Ownership Structures Influence on Economic Efficiency of Commercial Banks: Case of Tanzanian Commercial Banks

Abstract

This paper examines the impact of bank ownership structure on economic efficiency of Tanzanian commercial banks. The study adopted qualitative and quantitative methods for data collection by collecting  primary data from bank customers and bank officials of thirty two commercial banks in Tanzania that were already registered by the Bank of Tanzania at the end year 2011.We distributed 1600 Self-administered questionnaires to customers and 184 to bank officials. Of these, 893(60%) of bank customers and 81(44%) of bank officials responded. Data analysis used SPSS 17.0 version to estimate the mean (SD) score and to perform the correlation test.  Study findings show that there is no significant relationship between bank ownership structure and banks efficiency i and there is no significance difference in bank efficiency indicators between semi-quasi and private banks. Further findings reveal that Private Banks are more likely to have adequate operating hours convenient to customer and have more transparency in dealing with customers as compared to semi-quasi banks. Private Banks are more likely to have proper and accurate disclosure of financial statements while Semi-quasi banks are more likely to have adequate number of staff to deliver services. Therefore all banks should investigate if there other factors that might have caused the changes of these bank efficiency variables over time as indicated by the trend analysis.

Key words: Bank Ownership, Economic Efficiency, Tanzania