The Dutch development bank Financierings-Maatschappij voor Ontwikkelingslanden (FMO) recently led a senior loan package of USD 125 million in favor of Tanzania’s National Microfinance Bank (NMB). NMB is a commercial bank offering microfinance services, whose primary shareholders are the Netherlands-based investment company Arise, which holds 35 percent of the bank’s shares, followed by the government of Tanzania with 32 percent. As of September 2022, NMB reported total assets of TSH 9.5 trillion (USD 4 billion), customer deposits of TSH 7.2 trillion (USD 3 billion), active loans of TSH 5.6 trillion (USD 2.3 billion) and nine-month profit of TSH 464 billion (USD 198 million).
Of the total loan package, FMO provided USD 75 million, and the French development finance institution Promotion et Participation pour la Coopération Économique (Proparco) supplied USD 50 million. The loan has a 6-year term and is to be used to finance micro-, small and medium-sized enterprises (MSMEs), agricultural enterprises and green projects in Tanzania. FMO is supplementing the loan with technical assistance to “support the bank in establishing a green portfolio.”
Established in 1970, FMO is 51-percent held by the Dutch government and 49-percent by private investors. The institution works toward the UN Sustainable Development Goals by funding capacity development and placing debt and equity investments in sectors such as agribusiness, financial institutions and energy. As of December 2021, FMO reported a total committed portfolio of EUR 9.7 billion (USD 10.2 billion).
Proparco is a member of the AFD Group, whose other member is the French government’s Agence Française de Développement (AFD). The organization funds financial institutions and other businesses in Africa, Asia and Latin America to promote sectors such as agribusiness, education and renewable energy. During 2021, Proparco approved EUR 2.3 billion (USD 2.4 billion) in new disbursements.
By Vaughn Rajah, Research Associate
Sources and Additional Resources
FMO transaction overview
https://www.fmo.nl/news-detail/5e5ff05f-b563-4242-a1b3-8bfcaf7b24ed/monthly-transaction-overview-december-2022
NMB homepage
https://www.nmbbank.co.tz
NMB financials
https://www.nmbbank.co.tz/investor-relations-nmb/financial-and-regulatory-reports/financial-reports
Proparco homepage
https://www.proparco.fr
FMO homepage
https://www.fmo.nl
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