MICROCAPITAL BRIEF: National Microfinance Bank (NMB) of Tanzania Boost Deposit Interest Rate to 10%

National Microfinance Bank (NMB), a microfinance institution backed by the government of Tanzania, is attempting to increase deposit levels by offering ten-percent interest rates to certain accountholders.

NMB is looking to increase its deposits in order to increase its loan portfolio, which by March 2012 reached 61.5 percent of assets. 80 percent is maximum allowed by law.

NMB is among several banks That recently have implemented deposit rates above 10 percent, following an uptick of the inflation rate to 18.7 percent in April. NMB reached TZS 1.95 trillion (USD 1.2 billion) in deposits held as of March.

About National Microfinance Bank (NMB)
Established in 1997, NMB is a Tanzania-based microfinance institution (MFI). Established by the National Microfinance Bank Limited Incorporation Act, the bank initially provided payment services, savings accounts and very limited borrowing services. However, since mid-2010, the bank has been expanding its lending operations. NMB operates 140 branches reportedly covering 80 percent of Tanzania’s districts. For the year 2011, NBM reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 1.34 billion, total deposits of USD 1.12 billion, return on assets (ROA) of 3.67 percent, and return on equity (ROE) of 31.6 percent. 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 Co Ltd own a combined 14.1 percent of NMB.

By John Crawford, Research Associate

Sources and Additional Resources

[1] http://allafrica.com/stories/201206010164.html

MicroCapital.org story, May 22, 2012, “MICROCAPITAL BRIEF: National Microfinance Bank 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.org story, May 8, 2012, “MICROCAPITAL BRIEF: Tanzanian Government Provides Microinsurance to Cotton Farmers,” https://www.microcapital.org/microcapital-brief-national-microfinance-bank-nmb-of-tanzania-to-promote-savings-for-education/

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