National Microfinance Bank (NMB), a bank that was established in Tanzania in 1997, recently announced that it loaned TZS 150 billion (USD 105 million) to 354 coffee farming cooperatives in Tanzania. These loans represent the bank’s contribution to the nationwide Kilimo Kwanza initiative, which aims to revamp the country’s agricultural sector. According to Robert Paschal, head of NMB’s agricultural division, NMB intends the loans to increase productivity by helping farmers purchase agricultural inputs such as pesticides and fertilizers.
Although the loans will be used to pay annual operating costs, farmers argue that an extension of the repayment period from one year to three years will help them to invest in productive farming technologies that can improve the long-term sustainability of the agricultural program. One farmer asserted that the one-year repayment period would require her to use her entire annual income to meet her loan obligation. Other farmers raised the need for a financial education program to help farmers use the loans effectively and for the creation of a system that would give farmers easy access to agricultural inputs and equipment.
By Julie Moksim, Research Associate
About National Microfinance Bank (NMB): The National Microfinance Bank (NMB) was established in Tanzania in 1997 by the National Microfinance Bank Limited Incorporation Act. Initially the bank provided payment services, savings accounts and very limited borrowing services. However, since mid-2010, the bank has been expanding its lending operations. NMB operates 139 branches reportedly covering 80 percent of Tanzania’s districts. For the 2010 fiscal year, NMB reported pretax profit of TZS 78 billion (USD 51 million), total assets of TZS 2.1 trillion (USD 1.47 billion) and customer deposits of TZS 1.8 trillion (USD 1.26 billion).
Sources and Additional Resources:
IIP Media: “Over 350 Coffee Farming Groups Benefit From 150bn NMB Loans”, February 22, 2011, http://www.ippmedia.com/frontend/index.php?l=26301
MicroCapital.org Brief, August 2, 2010: National Microfinance Bank (NMB) Launches ‘Juhudi’ Loan Program to Improve Access to Microcredit in Tanzania, https://www.microcapital.org/microcapital-brief-national-microfinance-bank-nmb-launches-juhudi-loan-program-to-improve-access-to-microcredit-in-tanzania/
MicroCapital.org Brief, May 31, 2010: One of Tanzania’s Largest Banks, the National Microfinance Bank (NMB) Gives $63m in Loans to Small and Medium Enterprises (SMEs), https://www.microcapital.org/microcapital-brief-one-of-tanzanias-largest-banks-the-national-microfinance-bank-nmb-gives-60-5m-in-loans-to-small-and-medium-enterprises-smes/
MicroCapital’s Microfinance Universe Profile: National Microfinance Bank (NMB)
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