UTT relooks at its investment model

The Unit Trust of Tanzania (UTT) has since its inception ten years ago strived to strike a balance between its empowerment motto and financial sustainability.

But, in today’s competitive world in which no business entity can afford to survive in conservatism, UTT management decided to transform it into three business entities.

UTT Chief Executive Officer Dr Hamis Kibola says it is important for the company to change with changing market environment. management approved three new companies—UTT Asset Management and Investor Service (UTT AMIS), UTT Project and Infrastructure Development (UTT-PID) and UTT Microfinance.

The three firms will deal with businesses, pensions, company listing consultations, unlocking idle capital in real estate and infrastructures and micro-lending, among others.

Dr Kibola says the split came after a thorough research and the three firms have already been legally incorporated under the company law as limited companies by shares.

“The fund activities have increased overtime as a result of social and economic activities expansion. The best way forward was to separate the fund and give each department a total autonomy,” Dr Kibola said as he introduced the three companies.

The three incorporated firms are waiting for regulatory licences from the Capital Markets and Security Authority (CMSA) and Social Security Regulatory Authority (SSRA) before they go into full operations.

Dr Kibola who will head UTT AMIS says the company has not lost a single cent in the last 10 years of operations, “This is remarkable achievement and even the restructuring hasn’t cost a penny to the government.”

Under the new structure after the split, the companies will share among themselves the 17.8bn/- seed capital in the ratio of 4:3:3 for UTT AMIS, UTT-PID and UTT Microfinance.

All three companies expect to raise additional capital through Dar es Salaam Stock Exchange (DSE).  The modality has not been reached but the available options include issuing new shares and selling them to the public or issuing corporate bonds.

UTT AMIS will continue to manage the current five collective schemes and work out the introduction of new schemes like the Dollar Fund targeting Diaspora.

UTT AMIS acting Chief Operating Officer Rashid Mchatta says his office is finalising the licence issues with SSRA and CMSA to start offering pension and listing consultations.

“The licencing process has begun, once we are issued with all necessary documentations we will start working...at the moment we will continue using UTT licence,” says Mr Mchatta.

UTT-PID acting CEO Dr Gration Kamugisha says the new company would concentrate on unlocking idle capital, which basically indicates the existing of enormous business opportunities.

“Among the sectors we have identified are real estate and infrastructure development, says Dr Kamugisha. Projects that the fund has worked on include construction of Ushirika Building, at final stage, at Mnazi Mmoja in Dar es Salaam after mobilising 25bn/-.

Other projects are survey and sale of around 5,000 plots in Bukoba Municipality and the current engagement in similar projects in Lindi, Mtwara and Morogoro. The fund is also facilitating the construction of heart patient department at Muhimbili National Hospital.

UTT Microfinance acting CEO James Washima says the company issued about 400m/- micro-loans in less than two months, with half of the amount going to Savings and Credits Cooperatives, an indication that the demand for credit facilities in the country is high.

“The response is overwhelming,” Mr Washima says, “...this is because of the low and competitive interest rates on the loans we offer. We want to set a benchmark for micro-lending interest rates.”

The UTT was incorporated in June, 2003 under the Trustees Incorporation Act. The Fund was set up as successor to the Privatisation Trust (PT).

UTT, which is a trust fund wholly owned by the government through the ministry of finance, was established to mobilise and invest funds from low income earners to boost their livelihood.
Source: The Daily News, reported from Dar es Salaam, Tanzania
Share on Google Plus

About Abduel Elinaza

This is a short description in the author block about the author. You edit it by entering text in the "Biographical Info" field in the user admin panel.