NMB BANK SECURES 572BN/- FINANCING FROM EU LENDERS

NMB Bank's Treasurer - Aziz Chacha (right) and the Director of Financial Institutions of the Dutch Entrepreneurial Developmet Bank (FMO) - Marnix Monsfort (second left) display the signed Memorandum of Understanding whereby NMB Bank will be accorded a USD 11 million risk sharing facility from the Dutch Financial Institution, an agreement signed during the EU Business forum in Dar es Salaam recently.

NMB Bank Plc has secured financing support worth TZS 572 billion from three European Union (EU) lenders to help it consolidate lending activities, which amounted to over TZS 1 trillion in new loans last year.

The three financing deals to support private sector growth and drive financial inclusion in the country were sealed on the last day of the Tanzania - EU Business Forum in the presence of Zanzibar’s President, Dr Hussein Mwinyi.

The financing agreements signed on Friday last week comprise two long-term loans amounting to TZS 546 billion and a TZS 26 billion credit guarantee facility.

Whereas the European Investment Bank (EIB) has extended a euro 100 million credit line to NMB, the Dutch entrepreneurial development bank, FMO, has accorded the local lender a US$11 million risk sharing facility.

NMB has also secured a US$125 million syndicated loan arranged by FMO that has been provided in partnership with the French Development Finance Institution, Proparco, whose contribution to the total facility is US$50 million.

Speaking before the signing of the deals, NMB’s Treasurer, Aziz Chacha, said the business financing partnerships with the European financiers has come at the right time for the bank and the whole country at large.

“These arrangements will allow us to expand our sustainable and inclusive financing activities as we seek to spur growth in the gender space and blue economy,” Mr. Chacha noted adding that the lender extended new loans amounting to TZS 1.3 trillion in 2022.

He thanked the government for crafting sound economic policies that are making Tanzania attractive to international financing and capital.

Apart from supporting businesses led by women and blue economy projects, the funds NMB has acquired will also be used to finance general enterprises (MSMEs) and agribusinesses.

Mr. Chacha said the deal with FMO and Proparco demonstrates the confidence the two institutions have in NMB Bank and showcases the bank’s growing status as a trusted partner in the drive of accessible and sustainable finance for all.

“Via this new facility, we believe the funding will have a great impact on the country’s MSMEs, women owned businesses and agribusiness that employs close to 70 per cent of the Tanzanian population,” Mr. Chacha noted.

On his part, FMO’s Director of Financial Institutions, Mr. Marnix Monsfort, said that theirs, was not only financial support but also assistance in capacity development in environmental, social and governance practices.

The CEO of Proparco, Mr. Francoise Lombard, said their involvement in the deal was mainly to advance financial inclusion of MSMEs, women-owned businesses and agribusinesses in the country.

FMO said the financing guarantee it has offered NMB Bank has been provided under the NASIRA risk sharing program, which supports financial institutions to increase financing for MSMEs in underserved business segments.

“With this Nasira risk sharing facility, enabled by the European Commission and the Dutch Ministry of Foreign Affairs, we are able to support NMB in financing those groups who face the most challenges in accessing formal bank financing, such as entrepreneurs in the agriculture value chain, women and youth-led businesses,” Mr. Monsfort explained.

The NMB loan from EIB was part of the euro 270 million the European lender offered three local banks as part of its euro 540 million private sector investment support announced during the two-day business forum.

The EIB’s first engagement in Tanzania for seven years includes euro 170 million for new investments by female led companies across the country and euro 100 million investments in blue economy firms.

Mr. Chacha said the credit to NMB will allow businesses across Tanzania to grow and help harness the country’s potential and overcome long-standing barriers to investment and job creation.

“The European Investment Bank is pleased to return to Tanzania and confirm our largest ever support for targeted investment by entrepreneurs and businesses across the country,” noted the EIB Vice President, Mr. Thomas Östrost, before the signing ceremony.

”The new business financing demonstrates the close cooperation between Tanzania and European partners to ensure that Tanzanian companies can expand, create skilled jobs and explore new business opportunities in the years ahead.” he added.