Project detail - NMB Bank Plc

Who is our customer?

NMB Bank Plc. (“NMB”) is one of the largest commercial banks in Tanzania, providing banking services to individuals, micro-, small- and medium-sized enterprises (MSMEs), agribusinesses, and corporates. NMB has an extensive network of agents, branches, and ATMs spread across Tanzania and is enabling access to finance to end clients across the country.

What is our funding objective?

FMO is participating in NMB’s Tanzanian Shilling (TZS) denominated social bond issuance, in alignment with the Green & Social Bonds Principles, Sustainability Bond Guidelines, and Green & Social Loan Principles. The TZS equivalent of USD 25 million financing aims to create a positive impact in Tanzania by addressing the country’s socio-economic challenges, with a key focus on: financial inclusion, gender equality, supporting the development of the agricultural sector, youth empowerment, and job creation. On the financial inclusion front, the bond supports activities such as affordable housing, increasing access to essential services, and overall growth in the funding flow to MSMEs.

Why do we fund this investment?

NMB has been a strategic partner to FMO since 2013. Through this funding, FMO is providing NMB with flexible long-term funding, addressing a scarcity in Tanzania. The new bond participation supports NMB in achieving its strategic objectives, particularly in addressing some of Tanzania's socio-economic challenges by contributing to the private sector development. Notably, the investment will carry a 100% Reducing Inequalities (RI) label, as it will be exclusively used in Tanzania, which is classified as a Least Developed Country (LDC).

What is the Environmental and Social categorization rationale?

The client is categorized as E&S Category A in accordance with FMO’s Sustainability Policy and based on its overall loan portfolio and their increasing exposure in the corporate sector. NMB also has exposure to sectors with potentially significant and adverse environmental and social (E&S) risks, such as agriculture, oil and gas, and construction. Key potential impacts and risks related to these sectors in the country could include deforestation, loss of biodiversity, pollution, and labor and occupational health and safety risks. NMB's E&S risks are managed through an Environmental and Social Management System (ESMS) operated by a dedicated E&S team. An E&S Action Plan has been agreed to strengthen the ESMS implementation. As part of the transaction, it is agreed that NMB will continue to apply the EDFI Exclusion List, local E&S laws and regulations, and the IFC Performance Standards for applicable transactions.

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