The formerly state-owned bank, NMB, is a major lender, but has difficulty in acquiring the funds for the investments it would like to make. Swedfund has joined with other lenders to provide a solution to this.

60% of the country's economy is informal

Tanzania is a large country. In surface area, it is almost as large as France and Germany combined, and it is home to a population of 53 million. But even though GDP has doubled since 2004, the economy is still small. The majority of the population work in the agricultural sector (70 percent). The majority have very low incomes, and it is estimated that around 60 percent of the country’s economy is informal. It is a country which imports a great deal, but exports little. That is why it is important for the government to encourage domestic production.

Financing for entrepreneurs the most important catalyst 

“As in all markets, it is small and medium-sized enterprises that are the most important catalyst in kick-starting production, “says Ineke Bussemaker, CEO of NMB.

Tanzania was a country with a large public sector, which is now being partly privatised. NMB (National Micro-finance Bank) is a privatised player, whose role is to offer financial services to all, both private citizens and businesses.

“Tanzania’s liquidity is low. If we are to expand our lending operations, we need to find more sources of finance”, Ineke Bussemaker continues. “In particular, we need long-term loans in USD and EUR. These we are now getting, thanks to the funds which institutions such as Swedfund are injecting.“

Long-term approach ensures stability

Swedfund is providing NMB with a 7-year loan of USD 5 million. This loan as part of a larger financing pack-age totalling USD 25 million which is being made jointly with the Dutch and French development finance institutions FMO and Proparco. The loan will give more entrepreneurs the opportunity to apply for financing to NMB. It will involve a wide range of small and medium-sized enterprises. A large proportion of the business sector concentrates on the processing of locally-grown foodstuffs, but there are also enterprises in areas such as healthcare, small-scale retailing and various types of transport operations.

In addition to its loan business for entrepreneurs in the country, NMB also offers financing to innovative farmers. This is an area which Ineke Bussemaker would like to expand, and it will, in turn, increase financial inclusion in the country.

NMB a company with Dutch owners 

NMB is a well-run company, and its largest owners are the Dutch bank, Rabobank, with a 35 percent shareholding. Rabobank appoints directors to the Board. The bank’s CEO, Ineke Bussemaker, is also from Rabobank. “Rabobank is always available to us here in Tanzania.
When we need help with projects such as building a data centre or a credit centre, we phone their specialists for advice “, explains Ineke Bussemaker. “We also send our personnel to the Netherlands for training. 

But we are also aware that we are able to ask for help from the development finance institutions, thanks to our collaboration.”

Inclusion through the mobile wallet

Another vital mission which NMB has is to reach out to all the residents in the country with its banking services. NMB is the bank with the most branches in rural areas in Tanzania. This means that it can reach small businesses which no one else can.

Only about 16 percent of the population of Tanzania have a bank account, but many of them do have a mobile wallet through their mobile phones. All of NMB’s services are available via mobile phones. It is estimated that 65 percent of the population are included in the financial system in this way. Older pushbutton telephones from manufacturers such as Nokia are the ones most used.

“The mobile operators have expanded the infrastructure so that everyone can have a mobile phone. That’s why we want to expand our mobile banking services. We can offer these services at low charges, and they are highly scalable,“ commented Ineke Bussemaker.

NMB is happy to support the government’s ambitions, and has set a target of going from 2.2 million customers to 4 million within four years. But Ineke Bussemaker believes that a lot more people are just waiting to sign up.

Facts National Microfinance Bank:
• Its goal is to servet  all types of citizens in the country. On the business side, the bank specialises in particular on micro, small and medium-sized enterprises  
• Over 2 million customers,  600 ATMs and 175 bank branches 
3,400 employees of whom 45% is women

Facts Tanzania:
50 million people
• Included in Sweden’s development collaboration
• One of Africa’s fastest growing economies, GDP has doubled since 2004
• One of the least developed countries, according to DAC
• Small and underdeveloped banking sector

In the photo abolve is NMB’s CEO Ineke Bussemaker converses with Amina Salum Ali, Minister for Trade, Industry and Marketing at Zanzibar, and a local entrepreuner who owns a company that makes bags.

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