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7 Unmissable Facts About People's Bank Of Zanzibar (PBZ): From Record Dividends To Islamic Finance Leadership

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The People's Bank of Zanzibar (PBZ), a cornerstone of the Zanzibar archipelago's financial landscape, is currently undergoing a period of significant growth and modernization, solidifying its role as a key driver of the local economy. As of late 2025, the state-owned commercial bank is making headlines not just for its conventional banking services but for its pioneering efforts in financial inclusion, digital transformation, and its unique dual-banking model that caters to a diverse customer base.

The bank's recent strategic moves, including a record dividend payout to the government and the launch of innovative services like bancassurance, underscore its robust financial health and commitment to sustainable development across the islands of Unguja and Pemba. This detailed look explores the most recent and critical facets of PBZ, revealing why it remains a central figure in Tanzania's broader banking sector.

PBZ Profile: The Government of Zanzibar's Financial Pillar

The People's Bank of Zanzibar Limited (PBZ) is more than just a commercial bank; it functions as the primary financial agent for the semi-autonomous region of Zanzibar. Its profile highlights a deep-seated commitment to both commercial viability and public service.

  • Full Name: The People's Bank of Zanzibar Limited (PBZ)
  • Ownership: 100% owned by the Government of Zanzibar.
  • Licensing Authority: Licensed by the Bank of Tanzania (BoT), the central bank of the United Republic of Tanzania.
  • Primary Function: To carry on the business of commercial banking, serving retail, corporate, and institutional clients, including various Government agencies.
  • Unique Model: Operates a dual-banking system, offering both Conventional Banking and Sharia-compliant Islamic Banking services (PBZ IKHLAS).
  • Core Banking System: Utilizes the ICS Banks Islamic and ICS Banks universal software suites from ICSFS.
  • Role in Economy: Key institution for financing Small and Medium-sized Enterprises (SMEs) and large development projects in Zanzibar.
  • Digital Offerings: Provides Mobile Banking, Internet Banking, and a network of ATMs and service centers.

1. Record-Breaking Financial Performance and Government Dividend

A major indicator of PBZ's current strength is its stellar financial performance, which directly benefits the people of Zanzibar. In a recent significant announcement, the bank handed over a substantial dividend to the Zanzibar government, reflecting a period of high profitability and efficient operation.

The People's Bank of Zanzibar paid a record dividend of 10.5 billion Tanzanian Shillings (Tsh 10.5bn/-) to the government for a recent financial year. This record payout is crucial as it provides a significant boost to the government's budget, allowing for increased public spending on essential services like health, education, and infrastructure projects across the islands. The bank's ability to generate such high returns underscores its effective management and its dominant position in the local financial market.

2. Pioneering Dual-Banking: The PBZ IKHLAS Islamic Window

One of PBZ's most distinctive features is its commitment to providing comprehensive Islamic financial services through its dedicated window known as PBZ IKHLAS.

  • Establishment: PBZ was one of the first banks in Tanzania to open a dedicated Islamic banking window in 2011, establishing itself as an early leader in the sector.
  • Sharia Compliance: The services offered adhere strictly to the principles of Islamic Sharia, which prohibits the payment or receipt of interest (Riba).
  • Inclusivity: Crucially, the PBZ IKHLAS services are available to both Muslim and non-Muslim customers, broadening the scope of financial inclusion and offering an ethical banking alternative.
  • Market Impact: This dual-banking approach allows PBZ to capture a larger market share by catering to customers who prefer or require Sharia-compliant products, from deposits to financing solutions.

3. Driving Financial Inclusion Through Bancassurance

In a major development in July 2024, PBZ launched its bancassurance services, a strategic move designed to deepen financial inclusion across Zanzibar.

Bancassurance integrates insurance products with banking services, making insurance more accessible to the general public. The launch means PBZ customers can now easily access various insurance services directly through the bank's branches and service centers. Furthermore, the bank is offering loans specifically for insurance premium financing, removing a key financial barrier for many individuals and businesses seeking protection. This initiative is pivotal for increasing the resilience of the local population and Small and Medium Enterprises (SMEs) against unforeseen risks.

4. Partnership for Digital Transformation and Sustainable Growth

PBZ is actively involved in pushing Zanzibar's economy toward a digital future through strategic partnerships. It has teamed up with the United Nations Development Programme (UNDP) and Vodacom, a major mobile network operator, to implement a modern digital payments system.

This initiative is designed to boost economic growth and, uniquely, support conservation efforts in Zanzibar. By facilitating digital payments, the project aims to improve transparency and efficiency, particularly in sectors vital to the islands, such as tourism and environmental conservation. The collaboration leverages the bank's financial expertise with Vodacom's extensive mobile money infrastructure (M-Pesa) and the UNDP’s focus on sustainable development goals.

5. Expanding Role in SME and Development Project Financing

The bank's mandate extends beyond traditional commercial banking. PBZ is playing an increasingly crucial role in the development agenda of the Zanzibar government. Its strategic focus includes expanding its capacity to finance Small and Medium-sized Enterprises (SMEs) and large-scale development projects.

Supporting SMEs is vital for job creation and economic diversification in Zanzibar. By providing tailored financing solutions, PBZ acts as a catalyst for local entrepreneurship and helps to unlock the potential of various sectors, including the blue economy and tourism infrastructure.

6. Commitment to Modern Technology and Security

To support its dual-banking model and expanding digital services, PBZ has invested heavily in modern core banking technology. The implementation of the ICS Banks universal and Islamic software suites demonstrates the bank's commitment to operational excellence, security, and the ability to scale its diverse product offerings efficiently.

This technological foundation is critical for supporting services like Mobile Banking and Internet Banking, ensuring that customers' financial information is protected with advanced security features, including multi-factor authentication. The focus on robust technology is essential for maintaining trust and competing effectively in the rapidly evolving Tanzanian financial sector.

7. An Essential Hub for Local and International Business

As a wholly state-owned entity, PBZ is the default banking partner for numerous government transactions and international development flows into Zanzibar. Its stability and government backing make it a reliable partner for international investors, donors, and businesses operating in the archipelago. The bank serves a wide range of clients, from individual retail customers to large corporate entities and institutional clients, solidifying its position as an essential financial hub for all economic activity on the islands.

The People's Bank of Zanzibar is not merely keeping pace with the industry; it is actively shaping the future of finance in the region. By successfully integrating Sharia-compliant products, embracing digital partnerships for sustainable growth, and consistently demonstrating strong financial health, PBZ remains an indispensable institution for the prosperity and stability of the Zanzibar economy.

7 Unmissable Facts About People's Bank of Zanzibar (PBZ): From Record Dividends to Islamic Finance Leadership
people's bank of zanzibar
people's bank of zanzibar

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