WHAT YOU NEED TO KNOW ABOUT THE SAMIA INFRASTRUCTURE BOND

The Samia Infrastructure Bond is a financial instrument issued by CRDB Bank to raise funds for infrastructure development in Tanzania, particularly for urban and rural roads.

1. Purpose of the Bond

• The bond is meant to fund road infrastructure projects in collaboration with Tanzania Rural and Urban Roads Agency (TARURA).
• It aims to improve transport networks, facilitate economic growth, and enhance connectivity.

2. Key Features of the Bond

• Issuer: CRDB Bank
• Tenure: 5 years (Matures in 2029)
• Interest Rate: 12% per annum, paid quarterly
• Minimum Investment: TZS 500,000
• Subscription Period: Open from November 29, 2024 – January 17, 2025
• Oversubscription: Raised TZS 323 billion against an initial target of TZS 150 billion
• Listed on Dar es Salaam Stock Exchange (DSE) for trading

3. How Investors Earn Returns

• Investors buy the bond and receive fixed interest payments (12% p.a.) every three months.
• At the end of 5 years, they get back their initial investment (principal amount).
• Investors can also sell their bonds on the DSE before maturity.

4. Who Invested?

• The bond attracted corporate and individual investors:
• 327 companies and institutions contributed TZS 118.99 billion
• 6,896 individuals invested a total of TZS 204.1 billion
• 94% of investments were made via CRDB’s SimBanking platform, showing strong digital engagement.

5. Economic Impact

• Infrastructure improvement: Funds will be used to build and upgrade roads in both urban and rural areas.
• Job creation: Construction projects will provide employment opportunities.
• Financial inclusion: Small investors can participate with low minimum capital.

6. Secondary Market Trading

• After the initial subscription, investors can buy or sell the bond on the Dar es Salaam Stock Exchange (DSE).
• This provides an option for liquidity before the 5-year maturity period.

Why is it Successful?

• High-interest rate (12%), which is attractive compared to other investment options.
• Government-backed infrastructure projects offer a low-risk investment.
• Public trust in CRDB Bank and its ability to deliver.
• Strong investor participation, surpassing the initial target by 115%.