The Tanzania National Microfinance Bank (NMB) listed a TZS41.4b 3 year bond at the Dar es Salaam Stock Exchange (DSE) on July 19th 2016.
The listed bond carries an interest rate of 13% per annum and is set to mature in 3 years.
The revenue from the bond issue will be used for on-lending to the bank’s customers.
These include individuals, micro, small and medium sized enterprises as well as large corporates and Government institutions.
“This retail bond is expected to facilitate development of a vibrant retail bond market and open doors for other private sector companies, government companies and municipal bodies to explore new methods to meet financing needs,” Adelhelm Meru, Permanent Secretary of the Tanzanian Ministry of Industry, Trade and Investment, commented.
The listing follows NMB’s initial bond offer that took place from May 10th 2016 to June 8th 2016.
The minimum investment amount for the NMB retail bond was set at TZS500,000, while NMB’s target was to raise TZS20b.
However, the bank received 1,811 applications worth TZS41.4b hence the bond was oversubscribed by 107%.
Ineke Bussemaker, Managing Director for NMB said: “The three year bond was not only a major development in the sector but also in the retail market, as NMB became the first bank to over subscribe by over double the initial target.”
NMB is the second bank in Tanzania to list its retail bonds at the DSE. In February 2016, Exim bank listed at the DSE a 6 year bond with a coupon rate of 15.56% per annum.