Workers at Tanzanian’s National Microfinance Bank (NMB) have gone on strike after not receiving a lump sum benefit payment that was supposed to be paid to NMB by the government after an initial round of privatization in 2005. NMB’s management, who describe the strike as “illegal,” contends that the bank cannot pay the lump sum to workers because the government is yet to finalize the payment to NMB. The workers are represented by the Tanzania Union of Industrial and Commercial Workers (TUICO).
In 2005, The Government of Tanzania privately sold 49 percent of its complete ownership of NMB, raising USD 29.4m. As part of this deal, a lump sum benefit payment was supposed to be made to NMB workers. The government has yet to finalize the payment to NMB. NMB documents show that the workers were demanding the payment before the companies recent IPO, a proposal that would have caused them to lose their right to 5 percent of the shares to be made public. According to Reuters, the strike could delay salary payments to the country’s civil servants. To learn more about this initial sale, please read this previous MicroCapital story.
The strike comes at an inopportune time for NMB. After a year of delays, the government recently offered another 21 percent share of the company to Tanzanians in an initial public offering (IPO), raising approximately USD 55m. Many people criticized the IPO because the Tanzanian government failed to abide by East African Customs Management Act, which states that three countries must be treated as locals in any IPO. Instead, the government only made shares of the bank available to Tanzanians. So far, the results of the IPO are not available on the NMB website, nor were they included in available stories covering the strike. To learn more about the IPO, please read this previous MicroCapital story.
National Microfinance Bank has over one million customers, 120 branches and 100 ATMs in Tanzania. The company does not provide financial data on its website, nor does it report information to MIX Market, the Microfinance Information eXchange. Before the recent IPO, NMB shareholders included the Government of Tanzania (51 percent), Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (RABO Bank) (34.9 percent), National Investment Corporation LTD (NICO) (6.6 percent), Exim Bank Tanzania (5.8 percent), and the Tanzania Chambers of Commerce Industries and Agriculture (TCCIA) (1.7 percent).
By Greg Casey, Research Assistant
Additional Resources:
Reuters: “UPDATE 1-Tanzania’s Microfinance bank workers strike”
Daily News Online: “TUICO leaders summoned for NMB strike”
MicroCapital Story: August 18, 2008: “MICROCAPITAL STORY: Tanzanian Government Will Bar Kenya and Uganda from Participating in National Microfinance Bank Initial Public Offering Worth USD 55m”
MicroCapital Story, January 4, 2007: “Tanzanian National Microfinance Bank to Be Listed on Dar es Salaam Stock Exchange by June 2007”
MicroCapital Story, October 6, 2005: “Tanzanian Microfinance Bank Begins Rapid Privatization as Government Sells 49%”
National Microfinance Bank: Home
MIX Market: Tanzania
Rabobank Group: Home
National Investments Company Ltd: Home
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