NMB’s ‘Jasiri Bond’ makes history with listing on Dar bourse

Dar es Salaam. NMB Bank’s Jasiri Bond was listed on the Dar es Salaam Stock Exchange (DSE) yesterday to become the first gender-based financial instrument to list on the bourse in Sub Saharan Africa (SSA).

NMB Bank’s three-year bond – which was issued in February this year – was oversubscribed by 197 percent when Sh74.26 billion was raised against a target of Sh25 billion and a green shoe option of Sh15 billion.

“By listing here, Tanzania becomes the first country in SSA to list a gender-based bond on the stock market. Tanzania had become the pioneer of such financial instruments in the entire SSA,” the director of capital markets from FSD Africa, Mr Evans Osano.

He was speaking during a function to list the NMB Jasiri Bond at the DSE yesterday during a function that was graced by the deputy Permanent Secretary in the ministry of Finance and Planning, Mr Lawrence Mafuru.

The resident representative for the International Finance Corporation, Mr Frank Ajilore shared similar sentiments, saying apart from giving Tanzania recognition, the bond will also boost women’s access to finance.

The development director at the British High Commissioner in Tanzania, Ms Kemi Williams, said the oversubscription shows that there was a huge amount of untapped cash in the market. Gracing the event, Mr Mafuru, who is himself a respected banker and financial analyst, said the bold move over NMB Bank’s issuance of ‘Jasiri Bond’ and its ensuing oversubscription outcomes offers best lessons on how to economically develop Tanzania.

He said it was interesting to note that the bond was issued at a time when regulations for issuance of such financial instruments had not been approved.

“So while it is interesting to celebrate the oversubscription, in my view, what matters more is the courage (Ujasiri) and innovativeness behind issuance of NMB Bank’s Jasiri Bond because it came at a time when regulations had not been approved,” Mr Mafuru.

He likened the innovation to how former Bank of Tanzania Governor, the late Prof Benno Ndulu, turned telecom firms into key players in the country’s financial system.

“I remember I was the chairman of Tanzania Bankers Association at that time. As bankers, we opposed the move but Prof Ndulu said, we (bankers) have to learn to work with telecom firms,” he said.

According to the DSE chief executive officer, the NMB’s Jasiri Bond was issued at a time when the Capital Markets and Securities Authority (CMSA) was only about to finalise regulations for issuance of all financial products that falls under the ‘sustainable instruments’ category.

“Sustainable Instruments are a new product in this market. In fact, the CMSA approved the regulations for such instruments on March 1, 2022. We commend NMB Bank for acting as a stimulant in forcing us to come up with the regulations for issuance of sustainable instruments,” he said.

NMB Bank Plc chief executive officer Ruth Zaipuna said by listing the bond on the DSE, investors who bought it during the primary market can now easily sell it while those that could not manage to buy can easily do so via stock market brokers.

She said in line with the objective of issuing the bond, the oversubscription means that NMB Bank now has more money for extension of affordable financing for women-owned or women-controlled enterprises and/or businesses whose products or services directly impact a woman.

“The other interesting aspect is that 96 percent of the 1,630 investors bought the bond through our branches….The oversubscription demonstrates the trust that investors, both local and foreign, have over NMB’s operations and a vast opportunity to invest in the local capital markets,” she said.

She said investors in the NMB Jasiri Bond will earn an interest rate of 8.5 percent per annum payable quarterly throughout the three years, until March 2025.

The CMSA chief executive officer, Mr Nicodemus Mkama said the oversubscription of NMB Jasiri bond was a clear indication that the liquidity in the market was good and that investors were eagerly looking up to financial products that meet their aspirations.

An analysis of the 1,630 investors who bought the bond shows that 99 percent of them were domestic ones while 99.9 of them were retail ones. “Interestingly, 83 percent of all the investors who took part in the bond do not live in Dar es Salaam. This means that there is money outside the commercial hub and that people only need to be offered with the right financial products to invest in,” he said noting that the bond met international standards as required by the International Capital Markets Association (ICMA).

He said by massively buying the bond that is meant to support women, investors have also shown their willingness to work with the government in its efforts to empower women economically.

NMB worked with FSD Africa who offered technical assistance to develop the NMB Social Bond Framework that was reviewed and given a Second Party Opinion (SPO) by Sustainalytics.

In this issuance, NMB worked with Orbit Securities as a sponsoring broker.