FMO is pleased to announce a USD 11 million NASIRA risk sharing facility for NMB Bank Plc. in Tanzania, FMO’s long-term client since 2013. The risk sharing facility will be used to support NMB Bank in increasing financing for micro, small and medium-sized enterprises (MSMEs) operating in Tanzania.
Overview NASIRA program
FMO’s NASIRA risk sharing program supports financial institutions to increase financing for MSMEs with a focus on underserved business segments, such as women-owned and youth-owned businesses, who often remain underbanked due to high risks - both perceived and real - involved in lending to them. FMO’s NASIRA program narrows the financing gap for these groups by sharing possible credit losses with the financial institutions and thereby reduces the risk involved. In addition to the risk sharing facility, the NASIRA program also includes technical assistance funding to support the financial institutions in serving these vulnerable groups, as well as a portfolio management tool to facilitate an automated monitoring process.
NASIRA is supported by the European Commission and the Dutch government and was launched in August 2020. Since then, 11 transactions were signed with financial institutions across Africa, Middle East and Central Europe for a total of USD 270 million. East Africa has been a strategic focus of the program with USD 80 million of signed transactions to date. This facility with NMB Bank is the first in Tanzania.
NASIRA and NMB
Through this facility, FMO will be providing NMB Bank with a revolving unfunded portfolio guarantee covering NMB’s MSME loan portfolio up to a maximum of USD11 million. NMB Bank has a strong focus on financing MSMEs with the guarantee specifically focusing on MSMEs within the agriculture value chain, women & youth-owned businesses who face the most challenges in accessing formal bank financing. Additionally, FMO is ready to support NMB with technical assistance as required to support with reaching these new segments.
Marnix Monsfort, Director Financial Institutions of FMO, said: “We are very pleased to sign this USD11mln Nasira Facility with NMB at the EU-Tanzania Business Forum today. NMB is a long-standing strategic partner, focused on financing micro and small enterprises in Tanzania. With this Nasira risk sharing facility, enabled by the European Commission and the Dutch Ministry of Foreign Affairs, we are able to support NMB in financing those groups who face the most challenges in accessing formal bank financing, such as entrepreneurs in the agriculture value chain, women and youth -led businesses.”
Aziz Chacha, Treasurer, NMB Bank said: “NMB and FMO have a long-standing strategic partnership, this guarantee facility comes at the right time as we advance our support as a financier to the MSMEs segment which is mostly occupied by women and youth led businesses. We aim not only to offer financing under this Nasira risk sharing program but also design products and services working with FMO that will allow inclusion of these entrepreneurs in the banking industry. Ultimately, create job opportunities and positively transform their livelihood."
The EU Delegation to Tanzania said: "By focusing on private sector development, we expect to generate employment, economic diversity and consequently more sustainable economic growth."