MICROCAPITAL BRIEF: Tanzania’s Yetu Microfinance to Launch Initial Public Offering of $5.36m

Yetu Microfinance (Yetu), an unlicensed microfinance institution (MFI) in Tanzania, recently announced that it will launch an initial public offering (IPO) with the aim of raising TZS 12.5 billion (approximately USD 5.63 million) for expansion and to comply with the country’s regulatory minimum core capital of TZS 5 billion (approximately USD 2.25 million) for licensed MFIs. Altemius Milinga, the managing director of Yetu, said that “the purpose of this offer is to recapitalise the company further and upon attaining the capital requirements for licensed financial institution, converting it into a microfinance bank”[1].

The transaction’s structure will include a “green shoe option,” which will allow underwriters of the IPO to sell more shares than originally planned by the issuer. 40 percent of the shares are offered for sale at the price of TZS 500 (USD 0.225) each, and the remaining 60 percent of the shares are expected to be sold after the IPO. Individuals will be allowed to purchase a minimum of 200 shares. The offer will be closed on July 30, 2015. The MFI is expected to list at the Enterprise Growth Market, the Dar es Salaam Stock Exchange’s alternative market in August 2015.

As of year-end 2013, Yetu reported TZS 1.03 billion (USD 465,000) in profits. As of 2014, the organisation had approximately 32,000 customers who are served at three branches, three agencies and approximately 130 financial centres in Dar es Salaam, Lindi, Morogoro and Zanzibar.

By Victor Mugo, Research Associate.

About Yetu Microfinance Private Limited Company (Yetu)

Yetu Microfinance Private Limited Company (Yetu) was founded in 1997 in Dar es Salam, Tanzania. The organisation is an unlicensed microfinance institution (MFI) that aims to serve the unbanked and underbanked people of Tanzania through microfinance services, mobile banking and branchless banking. As of year-end 2013, Yetu reported USD 465,000 in profits. As of 2014, the organisation had approximately 32,000 customers who were served at three branches, three agencies and 130 financial centers in Dar es Salam, Lindi, Morogoro and Zanzibar. As of August 2015, the organisation is expected to launch an initial public offering to expand and raise capital to comply with the regulatory requirements for licensed MFIs. Further information on the organisation is unavailable.

 

Sources and additional resources.

[1] Optimism high as micro lender launches IPO

http://dailynews.co.tz/index.php/biz/46392-optimism-high-as-micro-lender-launches-ipo

 

[2] MicroCapital Universe Profile Yetu Microfinance Private Limited Company (Yetu)

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Yetu+Microfinance+PLC

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page

 

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