47379 - WCS COVID II NMBTZ

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Summary of Investment Information

Project Number

47379

Company Name

NMB BANK PLC

Date SPI Disclosed

May 31, 2023

Country

Tanzania

Region

Africa

Projected Board Date

Jun 6, 2023

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Jul 16, 2023

Department

CF3S2 - Regional Industry - FIG Africa/FIG Africa East & South

Industry

Financial Markets

Previous Events

Approved : Jun 7, 2023
Signed : Jun 26, 2023
Invested : Jul 14, 2023

Sector

Commercial Banking - SME Finance

Additional Project Attributes

Blended Finance

Project Description

The Project comprises of a senior loan of US$100 million to NMB Bank Plc (“NMB” or the “Bank”) under the COVID-19 Emergency Response WCS Envelope (WCS Envelope). The investment will help the Bank meet the COVID-19 related working capital and trade-related needs of its clients, all of which are small and medium enterprises (SMEs).

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	100.0
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Loans to SME Borrowers

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

IFC anticipates that the Project will support the Banks' capacity to sustain operations and to expedite post-crisis recovery. By sustaining the Banks' ability to provide working capital and trade finance loans to SMEs, the project is intended to promote the resilience of financial service providers, as well as broader stability that comes about by providing for the going concern of market participants in Tanzania. The Project Outcome will be realized by providing access to finance/liquidity to NMB. This will support the Banks’ capacity to sustain operations and to expedite post-crisis recovery. Specifically, this project intends to provide US$100 million working capital facilities to NMB, which will then on-lend to its clients (including SMEs) in key sectors of the economy, over the next two years.

IFC’s additionality is driven largely by our countercyclical role during crises. The Financial Institutions Group Facility component contributes successful experience with rapid crisis response efforts, an extensive network of Banks that support emerging markets; programs aimed at investing both large scale and transactional liquidity and capital for trade and working capital finance and mobilization capacity. The loan will provide NMB with additional liquidity support amidst prevailing global economic headwinds to meet the post COVID-19 related working capital and trade related needs of its clients, many of which are SMEs.

E&S Category Rationale / Risks and Mitigation

This project has been categorized as FI-2 in accordance with IFC's Policy IFC's Sustainability Policy. The purpose of the Project is to support the Bank to meet the post COVID-19 related working capital and trade-related needs of its SME clients. The E&S risks and impacts associated with these transactions are considered limited and can be managed through mitigation measures; the project portfolio risk is thus considered medium. The Bank's SME sectors are mainly trade, manufacturing, education, financial intermediaries, health, hotel and restaurant and building and construction with overall E&S medium risks. The main E&S risks and impacts of the Project derive from the E&S risks associated with the Bank's investment activities and its E&S capacity and system in place to manage these risks. These risks typically include occupational health and safety issues, pollution prevention, wastewater and labor and working conditions issues, and community impacts, among others. This project will not support activities on IFC Exclusion List, coal-related activities, or higher risk business activities that may include a) involuntary resettlement, b) risk of adverse impacts on indigenous peoples, c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage or d) significant occupational health and safety risks. The project will also not support production and trade of agro-commodities with high-risk country-commodity combinations. IFC's applicable E&S requirements for this Project will be the IFC Exclusion List, and country E&S laws and regulations in Tanzania. NMB Tanzania is largely aligned with IFC's labor standards under Performance Standards 2 on Labor and Working conditions.

The Bank has an established E&S Management system (ESMS) in place. As per the ESMS, the bank's E&S review include IFC exclusion list screening, initial categorization based on sector and amount, and E&S due diligence through a standard questionnaire assessing sub-clients against Tanzanian E&S regulations. The Bank has a dedicated E&S officer responsible for the ESMS implementation and has developed an external communication mechanism to address the public queries and concerns related to its investments. The Bank's induction training includes an E&S module for all employees.

Contacts

For Inquiries About the Project, Contact

NMB Bank Plc
James Rutta
Relationship Manager Financial Institutions & Correspondent Banking
+255 22 232 2019
James.Rutta@nmbbank.co.tz

www.nmbbank.co.tz

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This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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Task Title & Description	Anticipated Completion Date
Staff Training	12/31/2023

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