The National Microfinance Bank, a government-backed microfinance institution (MFI) in Tanzania, reportedly has reintroduced a warehouse receipt system of financing that will allow coffee farmers to use their product as collateral to receive loans. The system allows farmers to receive part of their loan before selling their crop, so they are not pressured to sell at harvest time when prices are low. NMB plans to allocate TZS 800 million (USD 505,000) to the project, to be disbursed to ten Agriculture Marketing Cooperatives Societies (AMCOS) in the Mara region of Tanzania. TZS 365 million (USD 230,000) has already been disbursed to four societies.
In 2011, NMB gave TZS 500 million (USD 315,000) to seven AMCOS for the same purpose, but unspecified problems resulted in only TZS 200 million (USD 126,000) being disbursed. Mr Samwel Mshote, the Lake Zone Value Chain Agribusiness Manager for NMB, reportedly said that the bank is doing “everything possible to address the challenges so that they [the farmers] can now use the whole money.”
By Charlotte Newman, Research Associate
About National Microfinance Bank (NMB)
Established in 1997, NMB is a microfinance institution (MFI) backed by the government of Tanzania. Established by the National Microfinance Bank Limited Incorporation Act, the bank initially provided payment services, savings accounts and limited borrowing services. Since mid-2010, the bank has been expanding its lending operations. NMB operates 142 branches reportedly covering 80 percent of Tanzania’s municipal districts. For the year 2011, NBM reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 1.34 billion, total deposits of USD 1.12 billion, return on assets (ROA) of 3.67 percent, and return on equity (ROE) of 31.6 percent. Dutch lender Rabobank owns a 34.9-percent stake in the bank while the Tanzanian government owns a 30-percent stake. Exim Bank Tanzania, the Tanzania Chamber of Commerce Industry, and Agriculture and National Investment Company Limited own a combined 14.1 percent of NMB.
Sources and Additional Resources
Daily News: “Coffee Growers in Tarime get Bank Assistance,” http://dailynews.co.tz/index.php/features/popular-features/6017-coffee-growers-in-tarime-get-bank-assistance
MicroCapital.org story, February 24, 2011, “MICROCAPITAL BRIEF: National Microfinance Bank (NMB) of Tanzania Loans $105m to 354 Coffee Farming Groups,” https://www.microcapital.org/microcapital-brief-national-microfinance-bank-nmb-of-tanzania-loans-105m-to-354-coffee-farming-groups/
MicroCapital.org story, April 10, 2012, “MICROCAPITAL BRIEF: International Finance Corporation (IFC), BNP Paribas Partner on $100m Facility to Increase Agriculture Financing in Sub-Saharan Africa, Eastern Europe,” https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-bnp-paribas-partner-on-100m-facility-to-increase-agriculture-financing-in-sub-saharan-africa-eastern-europe/
MicroCapital.org story, August 2, 2010, “MICROCAPITAL BRIEF: 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 Universe Profile: National Microfinance Bank
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=National+Microfinance+Bank+%28NMB%29
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