Ground-breaking Jasiri Gender Bond in Tanzania

In Tanzania, women-led businesses face a considerable finance challenge, highlighted by the African Development Bank’s estimate of a gap exceeding US$ 42 billion across Africa. FSD Africa played a pivotal role by offering essential technical assistance and support in the creation of the NMB Bank’s Social Bond Framework. Their efforts extended to obtaining a Second Party Opinion from Morningstar Sustainalytics, a key step that facilitated the successful launch of the NMB Bank Jasiri Gender Bond.

The bond has played a catalytic role in shaping Tanzania’s financial landscape by demonstrating the viability of using capital market instruments to channel private sector financing towards sustainable and inclusive growth initiatives.

The success of the bond was facilitated by the innovative approach of the Capital Markets and Securities Authority (CMSA). Following the International Capital Markets Association (ICMA) guidelines instead of creating local rules embraced global standards and laid the groundwork for local ESG product guidelines. This enhanced the regulatory framework, promoting sustainable and inclusive financial products.

The Jasiri Bond’s success in mobilising funds was remarkable, with its proceeds being fully allocated to women-owned or -controlled enterprises in less than a year, far ahead of the 18-month timeline envisaged in the NMB Social Bond Framework. The rapid deployment of funds, totalling TZS 74.2 billion across three quarters, underscored the bond’s effectiveness in addressing the urgent financing needs of women-led MSMEs. By providing loans at a highly competitive interest rate of 14%, compared to the market average of 19%, the bond substantially boosted the profitability and growth prospects of these businesses.

The Jasiri Gender Bond signifies a strategic enhancement in the bank’s support of female entrepreneurs. This financial instrument introduces accountability and transparency, demanding rigorous reporting and evaluation of fund deployment, attracting investors interested in gender-positive outcomes. Going beyond capital provision, the Jasiri Bond collaborates with entities like the African Guarantee Fund to address collateral challenges faced by women entrepreneurs. This ensures secured loans, expanding access to businesses and entrepreneurs traditionally underserved by conventional banking products.

Looking ahead, NMB Bank is committed to building on the success of the Jasiri proposition. The bank’s strategy is centred around a fourpillar approach that emphasises outreach, penetrating the women’s market with innovative services, enhancing financial literacy, and expanding market share. The strategy is designed to sustain the momentum achieved thus far and create a lasting impact aligned with the Sustainable Development Goals (SDGs), further embedding the principles of inclusivity and sustainability into Tanzania’s financial and economic systems.