Tanzania: Yetu Microfinance IPO subscribed 50%

Yetu Microfinance initial public offer (IPO) has been mostly subscribed by small investors who managed to buy half of the total bid.

The microfinance is the first one to raise capital through public via stock exchange and wanted to collect 12.5bn/- but instead got 50 per cent of the total IPO. 

Yetu’s Managing Director, Mr Altemius Millinga, said that most of the investors subscribed the IPO were small scale earners who on average committed 174,000/- in shares.

“We will come up with exact numbers next week as the allotment process is going on,” Mr Millinga said adding: “the allotment exercise is planned to end this week.” 

Due to many number of small investors who subscribed the IPO, the listing is pushed back from August 17 to a new date to be known next week.

Mr Millinga said the allotment process is slow as 12,500 small investors have to be registered and have a bank account. 

“CRDB is doing the job now and hope to be finished by the end of the week... thereafter we will know the listing date,” Mr Millinga said.

The IPO of Yetu Microfinance started in June 18 and was supposed to close on July 30, but was extended to August 29 to allow more investors to come aboard. 

Yetu IPO was expected to raise 12.5bn/- for expansion and meeting Bank of Tanzania’s requirement for minimum core capital of 5bn/- for microfinance institutions. 

The shares offered for sale are 25,193,213 that will be sold at the price of 500/-.

And the shares were expected to increase after the IPO to 36,972,249. Stock market analysts had it that Yetu IPO was expected to be oversubscribed because it deals and touches the grassroots level, and its profit were good. 

Yetu Microfinance 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.

Also analysts’ prediction was based on the fact that almost quarter of the shares put on IPO were pre-purchased during transformation of the microfinance to YOSEFO--Youth and Self Employment Foundation.

“So far,” Yetu’s prospectus showed,”a total of 11,779,028 shares worth 2,994,757,000/- has been subscribed and paid for.” 

The Microfinance started with a capital of 30m/- as YOSEFO as a lender to micro entrepreneurs and later clinch an award prize of 35m/- which was also directed to loan portfolio.

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 from Dar es Salaam, Tanzania
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