Mwanza Bank primary offer back on track

Fate of the Mwanza Community Bank initial public offer (IPO) will be known in September after principal stakeholders resolve some disputes related to share purchasing.

The IPO was set to start almost two years ago, but failed to take off as some Lake Zone municipalities and district councils failed to honour their obligations.

The Capital Market and Securities Authority (CMSA), Principal Public Relations Officer, Mr Charles Shirima, said the Nominated Advisor (Nomad) and principal stakeholders will make the final decision. “The Nomad is optimistic that the final decision would be positive.

We anticipate a good outcome. Things are still positive,” he told the ‘Daily News’ in an interview. 

Prior to November 2013, the IPO of Mwanza Community Bank was postponed twice to give more time for the Lake Zone municipalities and councils to make a decision on buying the community bank.

In 2013, the Nomad, Arch Financial and Investment Advisory, told ‘the Daily News’ that Mwanza City Council and Ilemela Municipality bought shares of the bank.

He however did not disclose the amount. According to Mr Shirima, the IPO is still positive as Nomad has been engaging the stakeholders throughout. The decision will come out on September 30 and “everything will be known after that.”

Mwanza Community Bank offered 5.0 million shares worth about 2.75bn/-, which is 88 per cent of the total shares on IPO, of which 600,000 have been retained by founder members. A share was to be sold at 550/- at a lot of 100 shares. It will be listed on DSE’s Enterprise Growth Market (EGM).

The bank is a brain child of Victoria SACCOs, which last year offered a 100 per cent dividend to its about 3,000 shareholders.

The SACCOs wanted to convert to bank and retain its name but decided to use other name in a different project. Stock experts had it that the mode of the institution works best should municipalities become shareholders to make the bank owned by Mwanza people.

Thus it was of paramount importance for all municipalities to become shareholders of the newly established community bank to drive home the true meaning of the institution. 

Mwanza, according to the 2012 census, has the population of 2.8 million people residing in seven municipalities -- Nyamagana, Ilemela, Kwimba, Misungwi, Sengerema, Magu and Ukerewe.

Technically, the bank existence depends on the ability to raise the required capital by Bank of Tanzania at the tune of 2.0bn/- which will warrant getting a provisional licence.

The investors, according to the Nomad, received the Mwanza Community Bank positively reflecting the achievement of another community bank, DCB Commercial Bank.
Source: Daily News, reported from Dar es Salaam, Tanzania
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