​Swedfund Enhances Access to Capital to SMEs in Tanzania

Swedfund invests MUSD 5 in Tanzanian National Microfinance Bank (NMB) through a syndicated loan led by the Dutch Development Bank FMO. The funds will primarily be used for on-lending to small-and-medium enterprises (SMEs) and corporate borrowers, thereby contributing to job creation in Tanzania.

Strengthening and streamlining of the banking sector is a prerequisite for a country's economic development. In Tanzania banks face difficulties raising capital from the market. The private sector is in turn dependent on funding from local banks in order to grow and create job opportunities. In this context, Development Finance Institutions have an important role to play, as they can assist with long-term debt to strengthen the banking sector.

NMB is one of Tanzania's largest banks with 2.5 million customers, both private individuals, SMEs as well as larger businesses. The bank has the country’s largest financial network with over 150 branches, most of which are in rural areas. NMB has also made significant investments to complement the physical presence with ATMs and various mobile and IT-based services. The bank has been market leader in establishing partnerships with the country's largest mobile operators and currently has one million users of mobile-based services. The availability of mobile services is vital to bring more people into the country's formal financial system.

Swedfund's investment is part of a syndicated loan led by the Dutch Development Bank FMO. Of the total sum of MUSD 35 Swedfund invests MUSD 5. The loan will be used to accelerate the growth in SME and corporate business, with focus on agribusiness.

"As a Development Finance Institution we have an important role to play in this type of investment. We can inspire other financiers with confidence, which is of great importance since it is difficult for banks to find long-term capital on the Tanzanian market,” says Anna Ryott, CEO of Swedfund. “We are pleased to support NMB who focuses on SME’s, and who understands the importance of creating accessibility through mobile services".