The National Microfinance Bank (NMB) seeks to raise sh 20billion in a retail bond in an effort to boost its capacity for increased lending.
A retail bond works in such a way that various investors issue loans to a business entity (in this case NMB) and in return the entity (NMB) pays the debtor interest on the credit.
NMB’s bond, which has been approved by the Capital Markets and Securities Authority (CMSA), carries a rate of interest of 13 per cent per annum. The trading of the bond closes on June 8. All individuals aged 18 and above are eligible for participation in the retail bond so long as they can invest a minimum of sh 500,000 into it.
Ms Anna Mwasha, the bank’s Investor Relations Manager said that CMSA had given NMB the green light to borrow up to sh 25billion through the retail bond and hoped that the sh 20 billion target would be easily reached.
The bank’s Corporate Affairs Manager, Ms Joseline Kamuhanda, told journalists that once successful, small and medium enterprises as well as employees of large businesses whose salaries pass through the bank would benefit from the bond, as well as farmers