The National Bank of Commerce (NBC) has officially launched Series 1 of its second tranche of the NBC Twiga bond, valued at TZS 27.2 billion, marking a significant initiative aimed at strengthening the small and medium-sized enterprises (SMEs) throughout Tanzania.

The strategic move underscores NBC's dedication to enhancing financial access and promoting economic development in the country.

According to a statement issued by the bank today, the five-year bond has been listed on the Dar es Salaam Stock Exchange (DSE), reinforcing its commitment to supporting micro, small, and medium enterprises (MSMEs). 

“The funds raised through the NBC Twiga bond will be directed towards providing essential financing to MSMEs, which are recognized as the cornerstone of the Tanzanian economy,” noted Theobald Sabi, Managing Director of NBC, in the statement.

He emphasized that by enhancing access to necessary funding, the bank is poised to unlock significant growth potential for the enterprises, thereby stimulating overall economic progression in Tanzania.

“Interest payments will be made semi-annually over the bond's duration, concluding in October 2029. Notably, earnings from this bond are exempt from withholding tax deductions, enhancing its appeal to both local and international investors.’’ He added.

Addressing the bond's potential impact, Mr. Sabi expressed enthusiasm for its role in bolstering the SME sector. “This five-year bond will not only strengthen the SME sector—which employs the majority of the country’s population—but will also expand access to finance and unlock new growth opportunities," he affirmed.

His remarks reflect NBC's ongoing commitment to driving sustainable economic development through financial inclusion and the support of budding enterprises.

The bond launch comes in response to a robust interest from the African Local Currency Bond Fund (ALCB Fund), a pan-African initiative focused on investing in local-currency corporate bonds. Recently, the ALCB Fund made a substantial investment of TZS 27.2 billion (approximately USD 10 million) in a privately placed senior unsecured bond, signifying their confidence in NBC’s financial strategy and the viability of local currency financial instruments.

Further enhancing the prospects of this initiative, the ALCB Fund's investment is supported by a grant from the Currency Exchange Fund (TCX), made available through its EU Market Creation Pricing Facility. This facility aims to encourage the use of local currency in development finance, which is pivotal for promoting economic stability and growth within Tanzania.

 “The NBC Twiga bond is set to catalyze transformative growth, benefiting both entrepreneurs and the broader economy, and establishing a bright future for Tanzania’s financial ecosystem,” 

“As we move forward with this initiative, it remains steadfast in our mission to empower the backbone of Tanzania’s economy, ensuring that SMEs have the support they need to thrive and contribute to the national development agenda.’’ He concluded.