NIC Bank acquires Savings and Finance, invests $6m in SMEs
Posted Monday, December 20 2010 at 20:05
Small and medium entrepreneurs (SMEs) in Tanzania are set to benefit from a $6 million investment by Kenya-based NIC Bank.
The bank, which has acquired Savings and Finance, Tanzania, will invest in businesses in Dar es Salaam, Arusha and Mwanza.
The NIC Bank Group, which was listed at the Nairobi Stock of Exchange in 1971, has approximately 22,000 shareholders and has acquired 51 per cent majority stake in Savings &Finance.
James Muchiri, the managing director and chief executive officer of NIC in Tanzania told The EastAfrican that the acquisition and rebranding of the Tanzania bank is a strategic expansion move by NIC to reach financial markets outside Kenya.
Mr Muchiri said the central bank, Bank of Tanzania (BoT) has approved the takeover and change of name to NIC Tanzania.
“We have seen a lot of business potential for small and medium entrepreneurs in Tanzania. We want to see all SMEs grow and their businesses become competitive in market,” he said.
NIC Tanzania said it will offer competitive interest rates for loans to SMEs, and the rates will be negotiable.
According to NIC, the bank also seeks to expand to other parts of the East African region, being driven by its vision of establishing long term, profitable customer relationships through the provision of a complete range of banking and financial services.
The bank has reported a 69 per cent increase in profit before tax for the third quarter ending September 30, 2010.
The group recorded Ksh2 billion (about $25 million), up from Ksh1.2 billion (about $15 million) registered during the same period last year.
On the local subsidiaries, both NIC Capital (investment banking) and NIC Securities (brokerage) have recorded profits for the first nine months of 2010.
NIC Capital is now a recognised player in both equity and debt capital markets and has been retained as the transactional advisor for a number of recent deals including the recently launched Housing Finance medium term note.
The bank aims to empower budding entrepreneurs within its target market with business-relevant information through regular financial seminars across the country.