The Luxembourg-based European Investment Bank (EIB), the long-term lending bank of the European Union (EU), recently loaned EUR 70 million (USD 92.4 million) to the National Microfinance Bank (NMB), a Tanzanian microfinance institution (MFI) that is 30-percent government-owned to support micro-, small and medium-sized enterprises (MSMEs) in Tanzania. The transaction is a long-term loan to NMB that will enable NMB to provide medium-term loans to MSMEs. NMB reportedly disburses USD 20 million per month to 45,000 micro-enterprises and 10,000 SMEs, according to Filbert Mponzi, director of NMB’s MSME business [1]. Further information on the loan is unavailable.
For the year 2012, NMB reported to the US-based nonprofit Microfinance Information Exchange (MIX) Market total assets of USD 1.54 billion, return on assets (ROA) of 4.71 percent, return on equity (ROE) of 36.1 percent and a gross loan portfolio (GLP) of USD 774 million.
By Jennifer Young, Research Associate
About National Microfinance Bank (NMB) Established in 1997, National Microfinance Bank (NMB) is microfinance institution (MFI) that was established in Tanzania by the NMB Limited Incorporation Act. The bank initially provided payment services, savings accounts and very limited borrowing services, but since mid-2010 the bank has been expanding its lending operations. NMB operates 142 branches reportedly covering 80 percent of Tanzania’s districts. For the year 2012, NMB reported to the US-based nonprofit Microfinance Information Exchange (MIX) Market total assets of USD 1.54 billion, return on assets (ROA) of 4.71 percent, return on equity (ROE) of 36.1 percent and a gross loan portfolio (GLP) of USD 774 million. Dutch lender Rabobank owns a 34.9-percent stake in the bank while the Tanzanian government owns a 30-percent stake. Exim Bank Tanzania, the Tanzania Chamber of Commerce Industry, and Agriculture and National Investment Company Limited own a combined 14.1 percent of NMB.
About European Investment Bank (EIB)
The European Investment Bank (EIB) was created in 1958 and now serves as the long-term lending bank of the European Union. In addition to supporting projects in EU member states, its main priorities include financing investments in likely future member states and EU partner countries, principally in the area of small and medium-sized enterprises. According to its website, “the EIB operates on a non-profit maximizing basis and lends at close to the cost of borrowing.” The total subscribed capital of EIB is EUR 242 billion (USD 317 billion) as at December 2011.
Sources and Additional Resources
[1] IPP Media Story, “NMB Bank ties knot with European Investment Bank,” http://www.ippmedia.com/frontend/index.php?l=56718
[2] AllAfrica Story, “Tanzania: NMB, European Bank Seal Sh140 Billion Deal,” http://allafrica.com/stories/201307050067.html
MicroCapital Story, February 5, 2013, “MICROCAPITAL BRIEF: National Microfinance Bank (NMB) of Tanzania to Establish 20 New Rural Branches,” https://www.microcapital.org/microcapital-brief-national-microfinance-bank-nmb-of-tanzania-to-establish-20-new-rural-branches/
MicroCapital Story, June 14, 2012, “MICROCAPITAL BRIEF: National Microfinance Bank (NMB) of Tanzania Boost Deposit Interest Rate to 10%,” https://www.microcapital.org/microcapital-brief-national-microfinance-bank-nmb-of-tanzania-boost-deposit-interest-rate-to-10-aims-to-increase-deposits/
MicroCapital Story, May 22, 2012, “MICROCAPITAL BRIEF: National Microfinance Bank (NMB) of Tanzania to Promote Savings for Education,” https://www.microcapital.org/microcapital-brief-national-microfinance-bank-nmb-of-tanzania-to-promote-savings-for-education/
MicroCapital Story, February 24, 2011, “MICROCAPITAL BRIEF: National Microfinance Bank (NMB) of Tanzania Loans $105m to Coffee Farming Groups,” https://www.microcapital.org/microcapital-brief-national-microfinance-bank-nmb-of-tanzania-loans-105m-to-354-coffee-farming-groups/
MicroCapital Universe Profile: National Microfinance Bank, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=National+Microfinance+Bank+%28NMB%29
MicroCapital Universe Profile: European Investment Bank (EIB), https://www.microcapital.org/microfinanceuniverse/tikiindex.php?page=European+Investment+Bank+%28EIB%29
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