MICROCAPITAL STORY: National Microfinance Bank (NMB) of Tanzania Releases Results of Oversold Initial Public Offering

After a long delay, the results of the oversold initial public offering (IPO) of Tanzanian National Microfinance Bank (NMB) have been released. In the IPO, the government sold 21 percent of its 51 percent stake in NMB. A recent worker’s strike at the microfinance institution (MFI) had delayed the announcement of the IPO results, which began on August 17^th. In total, 27,473 applications were submitted to buy 374.8 million shares valued at TZS 224bn (USD 184m), far more than the actual number of available shares. The microfinance institution (MFI) will be publicly listed on the Dar es Salaam Stock Exchange starting on November 7^th.

In the IPO, the government sold 64 million shares valued at TZS 38.4bn (USD 31m) to individuals and 16 million shares valued at TZS 9.6bn (USD 7.8m) to corporations. Five percent of the shares were supposed to be intended for the NMB workers, which would imply that they received 4.21 million shares valued at TZS 2.53b (USD 2m). These numbers conflict with earlier reports indicating the government planned to sell a total of 105 million shares valued at TZS 63b (USD 55m). No information explaining the discrepancy was available on the NMB website, nor the Tanzanian Government’s Consolidated Holding Corporation (CHC) website. To learn more about the IPO, please read this previous MicroCapital story.

The government has also announced how the oversold shares will be distributed. Individuals applied for 280 million shares valued at TZS 168bn (USD 138m). Each applicant will receive all requested shares up to 5,700 shares and 1.04 percent of any additional shares. Corporations applied for 94.8 million shares valued at TZS 56bn (USD 46m). Each corporate applicant will receive all shares applied for up to 200,000 shares and 4.6 percent of any additional shares. Since most applicants requested a relatively small number of shares, 88 percent of individuals and 78 percent of companies will receive their full order. The government had been expected to announce this earlier but delayed the process, blaming the recent worker’s strike.

Prior to the IPO, National Microfinance Bank was owned by the Government of Tanzania (51 percent), Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (RABO Bank) (34.9 percent), National Investment Corporation LTD (NICO) (6.6 percent), Exim Bank Tanzania (5.8 percent), and the Tanzania Chambers of Commerce Industries and Agriculture (TCCIA) (1.7 percent). Information regarding current holders of IPO shares was not readily available. Financial data was not available on the NMB website and the company is not listed on MIX Market, the Microfinance Information eXchange. To learn more about the privatization of NMB, please read this previous MicroCapital story.

Greg Casey, Research Assistant

Additional Resources:

Daily News Online: “Govt to return 170bn/- to applicants: NMB shares oversubscribed”

The Citizen: “NMB adviser postpones allotment of shares to Oct 17”

MicroCapital Story, September 12, 2008: Worker’s Strike at Tanzania’s National Microfinance Bank (NMB)

MicroCapital Story, August 18, 2008: Tanzanian Government Will Bar Kenya and Uganda from Participating in National Microfinance Bank Initial Public Offering Worth USD 55m

Microfinance Gateway: “Tanzania Bars Kenya, Uganda from Participating in MFI IPO”

Business Daily: “Tanzania bars foreigners from its hottest public share sale”

National Microfinance Bank: Home

NMB: Shareholder Information

NMB: History

National Investments Company Ltd: Home