Tanzania teachers’ bank to boost Dar bourse prospects

A local bank by teachers, Mwalimu Commercial Bank, is set to boost Dar es Salaam Stock Exchange (DSE) capitalisation to 25 per cent and transform capital market landscape in the country.

The bank, currently in final preparations before taking off and expected to list at the DSE alternative market in June, is expected to double the number of investors in the equity market by June, this year.

Capital Markets and Securities Authority (CMSA) Chief Executive Officer, Nasama Massinda, said during the official launching of the bank’s initial public offering (IPO) in Dar es Salaam that currently, participants in the equity capital markets are about 200,000. “…

Therefore, if all active members of the Tanzania Teachers Union (TTU) who are about 200,000 buy shares of Mwalimu Bank, the participants in the equity capital markets are expected to double,” Ms Massinda said.

The bank which is expected to list on DSE alternative market in June has over 200,000 shareholders, who have been given an offer of 100 shares valued 50,000/- each by their union.

TTU will cough 11bn/- to facilitate the offers to all its active members countrywide who are now encourage buying more share as means of offsetting financial burdens.

MCB is in its third week of initial public offer which will run up to first week of next month. The bank is expected to raise 25bn/- as seed capital for the institution.

“This is going to be a significant transformation in the Tanzanian capital markets landscape and will facilitate attainment of one of the goals of National Financial Inclusion Framework.

“Therefore the selling of shares of MCB in formation facilitates attainment of this national goal and facilitates the government objective of increasing the number of (listed) companies.”

The Deputy Minister, Regional Administration and Local Government, Kassim Majaliwa said the government would support establishment of the bank and urged other workers organisations to borrow a leaf from the teachers in their efforts to improve welfare of their members.

“The government full support the formation of the bank which should be emulated by other worker associations on bringing positive economic changes to their members,” Mr Majaliwa, who is a teacher and one of the first members to float the idea when he was a TTU regional secretary, said.

He advised the bank board and management to stick to banking sector discipline if MCB was to grow and survive challenges in the industry. He bought 3,000 shares at 1.5m/- using a mobile phone at the event.

Tanzania becomes the first country in Sub-Africa to buy shares using a mobile phone platform, which is user friendly and come into two language - Kiswahili and English. Ministry of Finance and Economic Affairs Deputy Minister, Mwigulu Nchemba, commended the move saying is the way of running economic development of people and nation.

“Common sense tells me that if a company is given 5.0 per cent waiver on corporate tax and refuse to list at DSE, then there is a tax loophole somewhere - we are looking to plug it,” Mr Mwigulu said.

The government gives listed company an incentive of paying 25 per cent instead of 30 per cent corporate tax as a way of wooing many firms to list at the stock market.

However only 15 companies have listed at the bourse over a decade ago. The government idea is to increase transparency on company financial through capital markets which will in turn increase the number of participants in the formal economy and thus increase government revenue.

TTU president, Gratian Mukoba, said MCB becomes the fourth workers bank in the globe after America, Japan and Israel, but is the first teachers’ bank in the world, thus put the country in a new map.
Source: Daily News, reported from Dar es Salaam, Tanzania
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