Tanzania: NMB Has Not Forgotten Masses, Says Minister

THE government has dismissed the assumption that it was encouraging the National Microfinance Bank (NMB) to operate commercially and neglect interests of the masses.

Mr Nimrod Mkono (Musoma Rural – CCM) had inquired as to why the NMB was operating as a commercial bank yet the government formed it to operate as a micro finance bank to take services closer to the people.

The Minister for Finance and Economic Affiars, Dr William Mgimwa, denied that the government was encouraging the bank but said that as a bank that was registered, it had the mandate to provide all services.

“The licence that NMB holds allows it to operate so. It is our belief that by letting as many financial institutions as possible to operate, then we will be easing services to the people,” he explained. Dr Mgimwa said that the government would continue to support the bank and asked the members of parliament and the public not to lose hope because allowing financial institutions to compete will at the end lead to better services.

He said that the government was doing all it could to create a conducive environment for financial institutions to do their businesses. Mr Mahmoud Hassan Mgimwa (Mufindi North-CCM) had asked in his basic question why banks such as CRDB, National Bank of Commerce and Barclays have not opened branches in Mufindi despite promises to do so.

The Deputy Minister for Finance and Economic Affairs, Ms Janet Mbene, said that since 1991 the government changed its financial policy not to work directly with banks. Ms Mbene however said that the government was striving to create conducive environment for the private sector to be involved in banking activities and that they had left it upon them to operate and make all the decisions.

“Allow me to call upon honourable Mgimwa and other Members of Parliament to work with the government to encourage the public in your constituencies to form community banks that go hand in hand with the needs of the area,” she said.

Ms Mbene said that the government was willing to provide technical support in the formation of community banks and that if people were ready, the Ministry was ready to approach the Bank of Tanzania for that purpose.

SOURCE: Tanzania Daily News

Tanzania: Higher dividends for government from NMB

Over 7.9bn/- has been received by government as its dividend earned from the 31.8 percent stake invested in the National Microfinance Bank (NMB) held through the Treasury Registrar.

Dr William Mgimwa, the Minister for Finance, received the dummy cheque for the money from the Chief Executive Officer for NMB, Mark Wiessing at the weekend in Dar es Salaam.

The executive officer said that his bank has evolved significantly since its privatisation in 2005, from a limited mandate, to a full-fledged bank which was listed on the DSE in 2008.

The bank has reported its pre-tax profit as 102bn/- and 72bn/- profit after tax.

Wiessing pledged his bank would continue to faithfully observe its mission, “… to bring affordable financial services to the Tanzanian community, in rural and urban areas.”

He assured the public that NMB would continue with its service improvement programme and increasing its branches across the nation boasting a capital expenditure budget of some 42bn/-.

He also stressed that his bank remains committed to serving government needs as well as community based projects by offering, “… competitive and reliable banking services .”

He gave a statistical summary of the NMB fund allocation for 2011 as having 31 percent of its value added resources assigned to the Government, 38 percent to employees, 21 percent to investment for expansion and growth, and 11 percent to its shareholders.

Speaking on behalf of the government, Minister Mgimwa applauded NMB for consistently paying an increasing dividend each year.

He praised the bank saying that, “..in 2010, the bank paid to the government a divided worth 5.7bn/- , and in 2011, it paid 7.9bn/-, that increment is a good indicator of the bank’s positive performance….” He commended the bank’s efforts in supporting corporate socials responsibility in Tanzania adding that it does not only support the society but also supports the government in eradicating poverty and improving the lives of those in needs.

Last week during its annual general meeting, the bank approved a total dividend attribution of 25bn/- , representing a 35 percent dividend pay-out ratio of the bank’s annual profit, or 50/- per share. More dividends will be paid to all shareholders in the coming weeks.

The approved dividend of 50/- per share is up 38 percent from the previous years 36/- per share, and represents a dividend yield of 6 percent

SOURCE: IPP MEDIA

Tanzania: NMB shareholders smile broadly with 25bn/- in dividends

National Microfinance Bank (NMB) has approved about 25bn/- in dividend to its shareholders (an equivalent of 50/- per share) during its annual general meeting held in Dar es Salaam on Saturday.

A press statement issued by the bank yesterday said the earning per share for the bank improved from 108m/- in 2010 to 144m/- last year.

The annual general meeting also approved the appointment of Prof Joseph Semboja as the incoming non executive director nominated by the government to replace Misheck Ngatunga, who served at a similar capacity for the last nine years.

Presenting the progress made in 2011 the Bank’s Chief The bank’s chief executive officer, Mark Wiessing, said they have further developed their ability to deliver financial services to chosen wholesale and retail customer segments.

He said in 2011 the bank grew the branch network to over 141, ATM cards with over 1.4 million cards in circulation and the growth of customer base to over 1.7 million.

According to him, the ATM network grew to 450 machines nationwide and mobile services reached over 600,000 active accounts.

The CEO clarified that in the money markets, treasury bills and treasury bonds remained on the high side.

Despite the adverse impact of increase in domestic inflation combined with number of other factors such as load shedding, the bank’s profit before tax grew to 102bn/- and profit after tax reached 72bn/-

“Strong loans and advances, and transactional volume growth were the main contributors to these results,” he noted.

According to him, the bank will continue its efforts to further improve customer services through its entire channel, while continuing to control costs and manage credit and other risks.

Apart from its core business, the bank places a great importance to corporate social responsibility, he said, adding that in the recent years, it has taken its CSR role seriously and has endeavoured to contribute 1 percent of the profit after tax to worthy causes in the community.

For his part, the outgoing NMB Board Chairman Ngatunga, said the bank has developed significantly during the last nine years.

“I have watched it evolve from an institution with a limited mandate to become a fully fledged commercial bank, leading the market in many areas and making a significant contribution to the Tanzanian economy and tax revenue,” he said.

SOURCE: IPP Media

Tanzania: Tobacco farmers collect 6bn/- to form own bank

From IPP Media

Tobacco farmers in Tanzania are set to establish their own bank to begin with a capital of 6bn/- next month. The aim of setting up the bank is, among other things, to enable them secure loans easily.

Currently tobacco farmers only access loans from few commercial banks such as CRDB, National Microfinance Bank (NMB) and Azania Bank which dish out money at very high interest rates thus obstructing smallholder farmers from procuring loans.

Speaking to this paper on the phone yesterday, the chairperson of Tanzania Tobacco Farmers Association, who is also the MP for Mpanda-Rural, Moshi Kakoso, said the society has chosen Tabora municipality to be the headquarters of the bank because a quarter of tobacco farmers are found in the region.

“We expect more smallholder farmers to be cooperative in the founding of the bank because their presence in the setting up of the bank is necessary,” Kakoso said.

According to Kakoso, to get a loan from the bank, every party should have at least 2m/- in deposits, while the existing parties’ starts from the level of smallholder farmers in rural areas to farmers.

However, he added that, the association has decided that it will not sell tobacco in Shillings but in US dollars focusing on more profit to the farmers.

He said the society also wants the government to uphold to its 2009 decision aimed at increasing tobacco production from 58,702 tonnes to 60,000 tonnes.

Kakoso explained that, tobacco farmers, through their cooperatives and primary societies, will be the source to their agricultural inputs using bank credits.

The procured inputs will then be distributed to society members on loan basis. The members will then sell their harvests in cured tobacco through their societies which would maintain accounts with the loaning bank.

Previously, tobacco emerged as one of the main sources of government revenue among the total traditional exports, according to a Bank of Tanzania monthly economic review.

By the same vein, official government figures show that a total of 340bn/- was collected as tax from tobacco in the last five years.

About 52bn/- was collected in 2003/2004, some 59bn/- in 2004/2005, whereas 62bn/-was collected in 2005/2006.

At least 77bn/- was collected in 2006/2007 and 90bn/- was collected in 2007/2008.

Tobacco production rose to 59 million kgs in 2009 up from 22 million kgs in 2000 resulting in local farmers to earn as much as between 300,000/- and 500,000/- per ha in the previous season.

Globally, there is an oversupply situation resulting from increased worldwide production and reduced consumption due to the world economic recession, smoking restrictions/bans, increased taxation on tobacco products and tobacco products regulations.

Nigeria: MFBs working to meet CBN’s deadline on capital requirement

By Hope Moses-Ashike, Business Day Online

A stitch in time saves nine! You can call it an adage or a popular saying; it serves as a reminder to all directors and shareholders of microfinance that the earlier they comply with the Central Bank of Nigeria (CBN)’s deadline on categorisation, the better.

The implication is that it gives them timely opportunity to reposition so that investors, both foreign and local will know their status and be able to invest. It also enables the deposit money banks to assess their status and decide whether to accept them as corresponding bank.

The CBN in a circular released recently, gave all microfinance banks till December 31, 2012 to comply with the revised policy framework. The revised policy framework provides for three categories of microfinance banks and stipulated minimum capital requirements for each category.

Category one is a Unit Microfinance bank authorised to operate in one location and is prohibited from having branches/cash centres, while category two, a State Microfinance Bank is authorised to operate in one state or the Federal Capital Territory (FCT) and is allowed to open branches within the same state or the FCT, subject to prior written approval by the CBN for each new branch.

The third category is a National Microfinance Bank, authorised to operate in more than one State including the FCT and is allowed to open branches in all States of the Federation and the FCT but subject to prior written approval by the CBN.

In the circular signed by Olufemi Fabamwo, director, Other Financial Institutions and Supervision Department (OFID), CBN, new microfinance banks coming on board will naturally be required to meet the stipulated minimum capital requirement.

But for existing microfinance banks, the interpretation of the minimum capital requirement shall be shareholders’ fund unimpaired by losses.

Responding to the development, Olufemi Babajide, chairman, National Association of Microfinance Banks (NAMB) Lagos chapter said microfinance banks are taking position toward meeting the CBN’s deadline. “We are working toward that. Microfinance banks are taking position. There is still time, no microfinance bank will be able to meet the deadline. We are not desperate. We are not afraid.”

To Lanre Abiola, managing director, Gold Microfinance Bank Limited, Lagos, operators will meet up because there is enough time.

The circular states that the existing microfinance banks will require some time to raise additional capital, where necessary or to restructure their operation to conform to the revised policy framework. This is because many of the microfinance banks that currently operate as unit microfinance banks under the former policy framework also have existing approved branches cash centres which would require that they either transform to state microfinance banks under the revised policy framework or rationales those branches subject to the CBN approval.

The CBN gave microfinance banks three options to comply with the revised policy guideline. One option is to raise fresh capital to bring the capital base to the stipulated minimum of N100 million shareholders’ fund unimpaired by losses, to become a state microfinance bank under revised framework.

The second option is to obtain regulatory approval of the CBN to close all existing branches and cash centres and remain a Unit microfinance bank with a minimum capital requirement of N20 million shareholders funds unimpaired by losses, while the third option was to embark on mergers and acquisition such that the consolidated capital base of the combined institutions meets the stipulated capital requirement of a state or national microfinance bank.

The National Microfinance Bank to expand using SME-target service centres

From The Citizen

The National Microfinance Bank has launched a business centre to serve small and medium enterprises (SMEs), corporate and government entities.Bank’s ceo Mark Wiessing said services to be offered through the centre include lending, trade and foreign exchange services, as well as electronic solutions such as internet banking, and payroll services and salaried workers loans.

Plans are underway, he added, to launch more centres in Dar es Salaam, Mwanza and Mbeya regions.The Arusha business centre operates like a bank branch and would add to the seven NMB branches operating in the city, according to Mr Wiessing. A new branch is planned for Arumeru district in the region.

Inaugurating the centre Acting Arusha Regional Commissioner Mercy Sylla urged SMEs and corporate customers banking with NMB to use it to improve their businesses through various products and services offered.

“The opening of this centre proves that the bank is committed to offer better services to the government and its institutions in addition to SMEs and large businesses through issuance of vital business information,” she said.

The NMB Board Chairman, MrNgatunga, said the bank recognised the contribution of SMEs and large business customers in building the national economy and that was why specialised services were introduced for them.

“After a systematic assessment, NMB has identified challenges facing the entrepreneurs in accessing banking services to improve their individual well-being and nation economy as a whole, and the bank came up with a solution,” Mr Ngatunga said.

NMB is listed at the Dar es Salaam Stock Exchange and is the bank with the largest branch network in Tanzania, with 141 branches, 450 ATM’s and over 1.6 million customers.

It is partially owned by the Government of the United Republic of Tanzania and Rabobank of the Netherlands. NMB employs some 2600 staff nationwide.

Tanzania: NMB Posts 80 Billion Pre-Tax Profit

From Tanzania Daily News

NATIONAL Microfinance Bank (NMB) made pre-tax profits of 80bn/- in the three months to September 30, with strong indications for improved results for this year. In a statement issued by the bank over the weekend, NMB attributed the strong results for quarter three of this year on the continued growth of its core business lines.

Lending increased by 46 per cent year-on-year, while the bank’s total income also jumped 32 per cent from the previous year. The bank’s cost-to-income ratio for the year to date stands at 55 per cent.

“We are pleased with the results for the first three quarters of the year. They show that despite the uncertain external environment, NMB is able to generate sustainably strong results in a resilient Tanzanian economy that has continued to grow at some 6 per cent per annum,” said the bank’s CEO, Mark Wiessing.

NMB said its loans and advances have continued growing to exceed 1 trillion shillings thanks to the strong quality of its loan portfolio, with a non-performing loan ratio of less than 2 per cent.

“The bank’s non-interest income is also up 28 per cent year-on-year on the basis of transactional volume growth, including from the bank’s retail business and electronic channels such as Mobile banking and Automated Teller Machines (ATMs),” said the bank.

Mr Wiessing said despite the Euro debt crisis and some short-term volatility in the local financial markets and barring unforeseen circumstances during the rest of the year, the bank expects to show similarly encouraging results for the full year 2011.

“With a core capital of 229 billion shillings, a capital adequacy ratio of 20 per cent (well above the minimum regulatory ratio of 12 per cent) and strong liquidity as evidenced by our loan to deposit ratio of 58 per cent, NMB is well positioned for continued future growth in both its wholesale and retail business lines,” said the bank’s Chief Financial Officer (CFO), Waziri Barnabas.

After its privatization in 2005, NMB invested heavily in the expansion of its network, which grew from 100 to 140 branches in five years. The bank’s customer base also rose from 600,000 to 1.6 million customers, with over 30 to 40 per cent of all Tanzanians who have a bank account choosing NMB as their bank.

More than one million NMB customers currently use ATM cards, with the number of the machines increasing to 450. The bank now employs 2,700 workers countrywide, almost double the 1,500 staff members previously.

NMB also pioneered mobile banking services in Tanzania three years ago, with over 550,000 customers currently using the service.

NMB mobile bills payment service facilitates payment of DSTV subscriptions, DAWASCO bills and Tanzania Revenue Authority (TRA) Property Tax and Personal Tax.

Tanzania: Sitta urges National Microfinance Bank to expand services to other EAC countries

From IPP Media

East African Cooperation minister Samuel Sitta has challenged the National Microfinance Bank (NMB) to expand its operations to other countries in the regional bloc.

He threw the challenge in his opening speech at the Rabbobank Annual Global Trade and Commodity Finance (TCF) conference in Arusha.

Rabobank headquartered the Netherlands has 35 per cent shares in the NMB.

Sitta said East African Community (EAC) member states – Tanzania, Kenya, Uganda, Rwanda and Burundi – were working to promote co-operation among the stock exchanges and capital markets in the region.

“We are also actively engaged in the establishment of a regional stock exchange within the community with trading floors in each of the partner states. We aim to create a vibrant capital market,” he said, adding:

“In these promising circumstances, I challenge the NMB to expand its services beyond Tanzania. We want to see the NMB in the near future operating in Kenya, Uganda, Rwanda, Burundi…”

Sitta said since its privatisation, the NMB has made significant strides in delivering financial intermediation services to the Tanzanians.

NMB chief executive officer Mark Wiessing said: “We are very proud that Rabobank, one of the leading TCF banks in the world has seen it fit to hold its annual conference in Tanzania, in partnership with the NMB. This is evidence of the perceived huge potential of Africa and of Tanzania.

But it is also evidence of the significant progress of NMB itself, in establishing itself as a credible partner for Tanzania’s leading importers and exporters of agricultural or other commodities such as oil and fertilizers.”

“We already play a very important role in financing small scale farms and cooperative organisations, including through seasonal crop finance and warehouse receipt finance, and are also moving higher up in the value chain, especially in food and agri related businesses. We expect to continue building on those successes and become even more active in Tanzania import and export flows.”

The head of Rabobanks global TCF business, Diane Boogaard, said: “We are delighted to hold our annual TCF conference in Tanzania. In partnership with banks like NMB, Zanaco in Zambia, BPR in Rwanda and Banco Terra in Mozambique, Rabobank looks forward to engage more with the continent.

We have brought our staff form the Americas, Europe and Asia to see for themselves what the opportunities are and to engage with regional and local customers and staff of the Rabobank partner banks to forge stronger relationships for the future.”

Tanzania: Dar court sets free 6 accused in NMB case

By Karama Kenyunko, IPP Media

Six accused, out of fifteen, in the National Microfinance Bank (NMB) robbery case were yesterday released by court in Dar es Salaam after the prosecution side failed to produce enough evidence against them.

The prosecution side led by principal state attorney Boniface Stanslaus claimed before Judge Faudhi Twaibu of the High Court of Tanzania – Dar es Salaam zone that it lacked substantial evidence against the accused.

Those released are: Mwanzo Bunga, Alimeshi Bibuka, Shafii Abdalah, Fabian Mchome, Selemani Nzowa and Deogratius Masawe.

Stanslaus claimed that while his side proceeded with the preparations for bringing in evidence against the accused, it realised that “there is no enough evidence” against the six to proceed with the case.

He therefore requested the court, as provided by law under section 91 (1) of the Criminal Procedure Act, to set the accused free.

Judge Twaibu accepted his request and released the seven mentioned accused in the spot.

Meanwhile, the remaining accused had their previous preliminary hearing read out to them whereby Stanslaus, alleging that on July 31, 2009 at the NMB – Temeke branch, two innocent people where shot dead at 10am.

He mentioned those killed as Self Mkwike and Corporal Josephat Mirambo. Stanslaus adduced that when the accused were executing the robbery, they fired continuosly towards the police chamber at the bank.

He claimed that the attack necessitated an exchange of fire between the accused and police who were manning the bank, during which two people were killed.

The prosecutor also claimed that the accused threw a hand bomb towards the police, that’s why it wasn’t easy for the law-enforcers to prevent them from breaking into the bank hall and steal money, whose exactly amount had not been established.

He added that on the day of the event three robbers attacked the bank and they were later identified, as Yusuphu Mlete, Isack Abdul and a police of the People’s Defense Force (PDF) MT 55935 Sajenti Methew Mwangunga were arrested.

He claimed that the robbers were identified in a police parade and pleaded guilty of the offence together with the colleagues Antony Jelemia, Richard Muhanza and Richard Tawete.

Stanslaus added that accused Yusuphu Mlete, Japo Salum, Said Hamis and Boniface Makai where arrested at Mbagala Kuu area in Dar es Salaam.

The court has given the state attorney until November 22, this year to gather up evidence against all accused.

Tanzania: NMB Pays 6 Billion Dividend to Government

By Ludovick Kazoka, Tanzania Daily News

THE National Microfinance Bank’s dividends to the government have increased from 4.9bn/- last year to 5.7bn/- this year.

Speaking at a ceremony to receive the dividend cheque in Dar es Salaam on Monday, the Minister for Finance, Mr Mustapha Mkulo, said the dividend was the results of 32 per cent of shares that the government owns in the bank.

“This is the great amount of dividends to receive from the NMB as the amount has increased as compared to past years,” said the Minister.

He noted that the wananchi would receive 3.5 billion/- as they own 19 per cent of shares sold by the government’s initial share of 51 per cent. He said the government remained with 51 per cent of shares after the decision by the government to pull out from the business in the early 2000s.

Mr Mkulo challenged the Public to buy the bank’s shares in order to benefit from the annual dividends as the bank was doing well in Dar es Salaam Stock Exchange (DSE).

He also called upon the people dealing with the Small and Medium Enterprises (SMEs) to open accounts with the bank because the bank provides its customer with soft loans.

The NMB Chief Executive Officer, Mr Mark Wiessing, said his bank was contributing to the national income through payment of taxes and provision of services to the public.

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