YETU Microfinance primary share sales to
the public is expected to be oversubscribed since the institution
operates at the grassroots level, according to an industry analyst.
Mr George Fumbuka, the Chief Executive
Officer of Core Securities told the ‘Daily News’ yesterday that
oversubscription of Yetu Microfinance shares was most likely because it
is a micro entrepreneurs lenders that has been helping a number of small
businesses to grow.
“I won’t be surprised for Yetu
(Microfinance) oversubscription,” Mr Fumbuka said during the official
launching of Yetu’s IPO in Dar es Salaam.
Yetu IPO, with green shoe option,
started last Thursday in a bid to raise 12.5bn/- for expansion and
meeting Bank of Tanzania’s regulatory requirement for minimum core
capital of 5bn/- for microfinance institutions.
It is expected to list at Dar es Salaam
Stock Exchange alternative market — Enterprise Growth Market (EGM) in
August. Core Securities is the sponsoring broker and Consultants for
Resources Evaluation Limited is nominated advisory.
The chief guest of the occasion, The
Executive Chairman of IPP Group of companies, Reginald Mengi, encouraged
small scale businesspersons to think big and muster the courage to try.
He said with courage, confidence and
trust they will eventually become successful. “But don’t regard yourself
as small businesspersons… in business you are businessmen and women...
that way you will go far,” Mr Mengi said amid cheers from hundreds of
members and clients of Yetu Microfinance.
Giving his story to inspire the
businessmen, the IPP chairman said he began from the bottom before
raising to the group of elite businesspersons: “No business has started
at the top.
At one point in the past it was at the
bottom.” He promised to buy 40,000 shares worth 20m/-. Over 70 per cent
of Yetu customers are women and youth, who started with the capital of
50,000/- but raised to some being able to borrow 20m/- and owning big
business that also offers employments.
Johari Mkonde, a businessman said he
started with a 50,000/- loan from the institution for charcoal business
15 years ago. He now has a 20m/- capital for his business which includes
a poultry farm with over 2,000 chicken, boutiques shop and several
bodabodas.
Gloria Mleli, owner of Tevienda Catering
Services, said in comparison with other financial institutions, Yetu
stands out of the rest as they are close to their clients thus enabling
them to succeed in business.
“If you borrow 300,000/- you pay 354,000
in six months, the interest is relatively low,” Ms Mleli said, “this is
about 6,000/- a month.”
Yetu Managing Director Mr Altemius
Milinga said the institution started in 1997 with a capital of 30m/- as
YOSEFO as a lender to micro entrepreneurs and later clinched an award
prize of 35m/- which was also directed to loan portfolio.
“The purpose of this offer is to
recapitalise the company further and, upon attaining the capital
requirements for licensed financial institution, converting it into a
microfinance bank,” Mr Milinga said.
The shares offered for sale are
25,193,213 that will be sold at the price of 500/-. And the shares
expected after the IPO will be 36,972,249. The offer will be closed on
July 30.
The minimum shares that an individual
will be allowed to purchase are 200 worth 100,000/-. Yetu’s prospectus
shows that it will distribute at least 60 per cent of available profits
as dividends but it will depend primarily on profits made and the
company’s capital requirements in compliance of banking laws.
The company has been generating profits
in the last five years since 2009 where a net profit was 298.9m/- and
climbed to 1.03bn/- of 2013. It has over 32,000 customers served at
three branches, three agencies and over 130 financial centres in Dar es
Salaam, Morogoro, Lindi, and Zanzibar.
Source: Daily News reported by Abduel Elinaza, from Dar es Salaam, Tanzania
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