MICROCAPITAL STORY: Tanzania’s National Microfinance Bank (NMB) to add new branches and ATMs in 2009

The National Microfinance Bank (NMB) of Tanzania is set to expand its number of branches in 2009. It announced a plan to add between 10 and 15 new branches and nearly double its number of ATM machines. Currently it owns 172 ATMs and has 128 branches. NMB is Tanzania’s largest bank in terms of number of branches and customer deposits. This is expected to cost nearly 10 billion Tanzanian Shillings (TZS) or USD 7.5 million.

Chief Executive Ben Christiaanse said “We think we are in a position that the [financial] crisis will not hit us in an extreme way”. Net Profit for the year ended 2008 was TZS 48,707 million (USD 36 million), an increase of TZS 9,872 million (USD 7.4 million) from 2007 to 2008 and the cost to income ratio decreased from 54.9 percent to 50.1 percent over the same period.

The NMB split from the National Bank of Commerce (NCB) in 1997 and as part of this deal gained most of the branches in rural areas. The NMB’s mission is to provide rural areas and the urban poor with access to financial services. NMB has branches in 80% of districts in Tanzania. Microfinance is offered at all branches. Total microfinance loans of TZS 54 billion (USD 40 million) to nearly 40,000 customers at an average of TZS 5 million per loan (USD 3,750).

Tanzania NMB does not report to the MIX Market, the microfinance information clearing house. In early 2009 its first Audited Annual Report was released for the year ended 2008. NMB has Total Assets of TZS 1,384,268 million (USD 1 billion); Total Loans and Advances to Customers of TZS 570,578 million (USD 428 million) and Total Customer Deposits of TZS 1,200,484 million (USD 901 million).  At the end of 2008 NMB had 1.1 million customers, an increase of 231,000 from 2007. Rabobank owns 34.9 percent, Government of Tanzania owns 30 percent, public shareholders own 21 percent, and other companies own 14.1 percent (Exim Bank Tanzania Limited (5.8 percent), the Tanzania Chamber of Commerce Industry and Agriculture (1.7 percent) and National Investment Company Limited (6.6 percent).

On November 7 2008 NMB was publicly listed on the Dar Es Salaam Stock Exchange, jumping 70 percent on the first day of trade. At this time the Tanzanian government sold 21 percent of its 51 percent stake.  For further information on the IPO please refer to this previous MicroCapital story.  The bank’s shares closed at 850 TZS on 17 April 2009.

By Sally Levy, Research Assistant

Additional Resources:

Reuters: Tanzania’s N.M.Bank to add new branches in ’09

Tanzania National Microfinance Bank (NMB): Home

Bloomberg Currency Calculator

MicroCapital Story: National Microfinance Bank (NMB) of Tanzania Releases Results of Oversold Initial Public Offering 

Pursuing Efficiency While Maintaining Outreach – Bank Privatization in Tanzania. Robert Cull, Connor P. Spreng. The World Bank, Development Research Group, Finance and Private Sector Team, December 2008.

 

 

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