Mwanza — MWANZA Community Bank (MCB) is expected to be listed at the Dar es Salaam Stock Exchange's (DSE) alternative market mid-December, an exercise viewed as a Christmas gift to portfolio investors.
The MCB will be the second product to be listed at the Enterprises Growth Market (EGM), which caters for short and long-term financing and identify feasible projects from small businesses or start-ups.
According to Tanzania Securities, stock brokerage firm, the bank anticipates to list on December 13 and the offer is open to all members of the public - domestic and foreign investors.
"Out of the 5 million shares available for subscription, 600,000 shares (12 per cent) of the total issues have already been issued and paid by the founding members," Tanzania Securities said in a statement. The bank put on offers five-million shares worth about 2.75bn/-, which is 88 per cent of the total shares on IPO since the first day and end the last day of this month.
The Mwanza Regional Commissioner (RC), Eng. Evarist Ndikilo said this week that the share issuances would facilitate to collect 2bn/- as a capital to establish a community bank as per the Bank of Tanzania (BoT) requirements.
The RC said the bank's prospectus for the IPO has been approved by the regulator -Capital Market and Securities Authority (CMSA) where a share goes for 550/- per share at a lot of 100 shares.
The prospectus shows in case of oversubscription the bank will retain the excess fund and subscribers will be allotted in full for the amount of shares applied for, but this is subject to CMSA's approval.
The prospectus shows that the bank in the first year of operation is expected to post a net-loss of 748.28m/-, but recover in the second year to post a net profit of 39.63m/-.
In its five years of operation projected to generate a net profit of 888.21m/-. MCB dividend amount will be recommended by the Board of Directors and approved by the shareholders at their discretion.
The bank is being established to provide financial services to the community, particularly the low-income segments of the society in a sustainable basis in Mwanza, the second biggest region economically.
With the development of market oriented systems, the creation of sustainable mechanism for provision of financial services to the communities has become a critical element for creation of genuinely enabling environment for the society and poverty reduction.
The idea to establish MCB came from various meetings held in the region by the Region Consultative Committee, Tanzania Chamber of Commerce, Agriculture and Industries (TCCIA) Mwanza branch, Victoria Saccos, Mwanza Saccoss and Mwanza Regional Business Council in 2012, where 130 members founded the bank and contributed a capital of 340m/-.