Tanzania: NMB Bank Lists Over $18m on Dar es Salaam Bourse

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Jul 2016
Tanzania, July, 24 2016 - The National Microfinance Bank Plc has listed a $18.8 million (Tsh.41.4billion) three year bond on the Dar es Salaam Stock Exchange (DSE) for the purposes of mounting the local capital markets as well as endorsing financial inclusion.

Speaking during the listing ceremony held in Dar es Salaam last week, Permanent Secretary Ministry of Industry, Trade and Investment, Dr.Adelhelm Meru hailed the listing and urged other investors in the private sector to follow suit.

 He explained that the retail bond is expected to facilitate development of a vibrant retail bond market and open doors for other private sector companies, government institutions and municipal bodies to explore new methods to meet financing needs.

 NMB (National Microfinance Bank Plc)  Managing Director, Ineke Bussemaker said: “The three year bond was not only a major development in the sector but also in the retail market, as NMB became the first bank to over subscribe by over double the initial target.”

 She said the overwhelming response to the NMB bond reinforces the need for banks to play a bigger role in developing the local capital markets as well as promoting financial inclusion.

 According to her, the listed bond carries an interest rate of 13% per annum and is set to mature in three years.

 She further commented that the retail bond received an overwhelmingly positive response from investors and was oversubscribed by 107%. The bank received 1,811 applications worth $18.8 million (Tsh.41.4 billion) with applications surging in the last week of the offer.

  “The proceeds of the bond issue will be used for on-lending to the bank’s customers who include individuals, micro, small and medium sized enterprises as well as large corporate and Government institutions ,” she stressed.

 This came after NMB announced that it surpassed its initial retail bond target by 107% whereby the bank received applications worth Tsh.41.4 billion, which is double the amount it had initially intended to raise. The bank had requested to raise an amount of $9.1 million (Tsh.20 billion) through its first ever retail bond during a bond investment campaign ascended recently.

The issuance of the bond was part of NMB’s strategy to diversify its funding sources. Following the listing, investors will be able to trade their bonds on the DSE and Stanbic Bank Tanzania Ltd was the lead arranger for this bond issuance whilst Orbit Securities Ltd and EA Capital Ltd were the lead placing agents. National Microfinance Bank Plc (NMB) is one of the largest commercial banks in Tanzania, providing banking services to individuals, small to medium sized corporate clients, as well as large businesses.

It was established under the National Microfinance Bank Limited Incorporation Act of 1997, following the break-up of the old National Bank of Commerce, by an Act of parliament .Three new entities were created at the time, namely: NBC Holding Limited, National Bank of Commerce (1997) Limited and National Microfinance Bank Limited.



 

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