Equity Investment in Access Bank of Tanzania
- Référence: P-TZ-IE0-003
- Date d’approbation: 13/12/1901
- Date de début: 01/01/2002
- Date d'évaluation: 14/04/2007
- Statut: En coursOnGo
- Agence d'implémentation: ACCESS BANK OF TANZANIA
- Emplacement: DAR ES SALAAM
1 The concept of the proposed project is the investment holding company model where a microfinance operator in this case AccessHolding AG, a Financial Institution established in Germany, with the help of the Bank and other like ' minded investors, establishes a microfinance commercial bank in this case Access Bank of Tanzania (ABT) that will provide financial services to the low income population in Tanzania. The investment holding company aims to become the controlling shareholder of the investee institution, which benefits from a consistent banking platform, transmission of best practice and shared brand identity.
2 The investment company actively manages the portfolio of investee institution and, through an associated company, provides management services and other essential support to nurture and develop the bank. In the case of ABT, the management of the investee institution will not be directly done by the investment holding company but by a separate specialized company with links to the investment holding company.
The project objective is to provide micro, small and medium-sized enterprises (MSME) as well as other clients in lower income strata, with a broad range of appropriate financial services.
The concept of providing financial services to micro-enterprises on a sustainable and commercially viable basis has been proven. The project is in line with Bank's Equity Investment Policy Guidelines. It is financially and economically viable with a satisfactory return on equity of 2.2 %, which is a primary criterion for justifying the project selection. Other factors include: ' The project is in line with the Bank's objectives to promote the development of capital markets as well as entrepreneurship & MSMEs' growth in regional member countries. ' The project is expected to have significant development impact as micro-enterprises engage more than 60% of the labour force in Africa. This is vital to the Africa's economic growth and development in terms of employment, income generation and poverty eradication. ' The proposed project concept is an innovative new approach that has demonstrated strong results with far reaching development impact when coupled with well-structured technical assistance packages that support capacity building in the MFIs. ' The preeminent example of the investment holding company model is ProCredit . since its inception in 1998, ProCredit Holding has grown its microfinance network to 19 microfinance banks and now serve more than 570,000 low income entrepreneurs with financing (plus additional depositors). ' Based on the ProCredit Network, Opportunity International and others, the Bank seeks to collaborate with other experienced microfinance operators to support the building of inclusive financial system in RMCs. 6.2 Exit strategy: The Project documentation and shareholders agreement will ensure that the Bank has a flexible exit strategy to facilitate its withdrawal from the project, once the Bank determines that it has achieved its objectives in pursuing the project. In this regard favourable exit terms in the documentation include a simple majority vote for sale of shares as well as flexible pre-emptive
1. Economic Benefits: ABT activities of which will be geared to meet the needs of microenterprises, small savers and borrowers through the methodologies that LFS Financial Systems has perfected, will add the following benefits to the economy:
(i) give credit accessibility to the poorer segment of population who were so far deprived from accessing the financial services available;
(ii) positive impact on employment and income generation leading to poverty alleviation and eradication;
(iii) mobilization of savings from the poorer segments of the population and from microenterprises;
(iv) gradual integration of the informal sector into the formal sector and the positive impact on the tax collection; and
(v) providing real contribution to governments development strategy for promoting micro and small enterprises.
2. Socio-economic benefits: These include long-term benefits that will remain beyond the project life to include both quantifiable and non-quantifiable elements. i.e. economic empowerment of women entrepreneurs, access to financial services to low income household on a sustainable basis, indirect benefits accrued from income and employment generation i.e improved health and nutrition of microfinance clients and their children, school fees and training . Such benefits will provide significant value to the economic development of the country.
BYARUHANGA Mpanga Juliet - PINS2