MICROCAPITAL BRIEF: One of Tanzania's Largest Banks, The National Microfinance Bank (NMB) Gives $63m in Loans to Small and Medium Enterprises (SMEs)

The National Microfinance Bank (NMB), one of Tanzania’s largest banks, has issued loans worth TSH 92 billion (USD 63 million) to about 45,000 small and medium enterprises (SMEs) countrywide [1]. Although NMB was largely privatized in 2005, with 49 percent of its shares in the hands of a consortium of banks and firms primarily in the Netherlands, the government of Tanzania continues to be the majority shareholder. According to Robert Pascal, the head of SMEs at NMB, the loans were issued in an effort to contribute to national social and economic development. Mr Pascal was quoted as saying, “SMEs are the engine for social and economic development, and NMB has a specific focus on the needs of these customers.” The loans were distributed through the newly formed “club” for business persons. The club will also help customers access information and business assistance. In its 2009 annual report, NMB reported TSH 1.6 billion (USD 1.1 million) in total assets and a dividend per share of TSH 31.40 million (USD 21,500) [2].

About National Microfinance Bank (NMB):

The National Microfinance Bank (NMB) was established in Tanzania in 1997 by the National Microfinance Bank Limited Incorporation Act. Initially the bank only provided payment services and savings accounts, and no or very limited borrowing services. However, recently the bank has begun to expand its operations. NMB is one of Tanzania’s largest banks with 135 branches covering 80 percent of Tanzania’s districts. In its 2009 annual report, NMB reported TSH 1.6 billion (USD 1.1 million) in total assets and a dividend per share of TSH 31.40 million (USD 21,500) [2].

The Government of Tanzania started the privatization process in 2005, selling 49 percent of its shareholdings to a consortium led by the Cooperative Centrale Raiffeisen-Boerenleenbank B.A. (“Rabobank Group”). There are no details on any plans for further privatization.

By Conner Brannen, Research Assistant

Sources and Additional Resources:

[1] Tanzania Daily News: “SMEs Get Loans Worth 92 Billion/- from NMB,” May 25, 2010: http://allafrica.com/stories/201005251054.html

[2] MicroCapital Universe Profile: National Microfinance Bank (NMB): https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=National+Microfinance+Bank+%28NMB%29

[3] MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Participates in $2.6m Capital Increase in Armenian Bank ARARATBANK Serving Micro-, Small and Medium-sized Enterprises, May 18, 2010: https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-participates-in-26m-capital-increase-in-armenian-bank-araratbank-serving-micro-small-and-medium-sized-enterprises/

[4] MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Provides $63m Loan to Polish Bank BGZ to Support Micro-, Small and Medium-sized Enterprises (MSMEs), May 18, 2010: https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-provides-63m-loan-to-polish-bank-bgz-to-support-micro-small-and-medium-sized-enterprises-msmes/

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MICROCAPITAL BRIEF: One of Tanzania’s Largest Banks, The National Microfinance Bank (NMB) Gives $63m in Loans to Small and Medium Enterprises (SMEs)

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