With his investment, Badoer through Badoer Investment Limited, has a 20 percent state in Hakika Microfinance Bank (Hakika MFB). The funding has pushed Hakika MFB’s capital to 5.7bn/-. “I am extremely humbled to be part of Hakika MFB. I like the value and idea of lending to SMEs,” said Badoer as he received his shares’ certificate in Arusha over the weekend.
He promised to keep funding the microfinance bank until it becomes a fully-fledged commercial bank.
The Dubai based tycoon’s investment is the second major deal in the East African region following a similar investment into Sumac Microfinance Bank to purchase 15.6 percent stake in the Nairobi based institution.
“I’ve fallen in love with the East African market because the middle class is contending with low financial service penetration, so there’s a huge untapped potential,” Badoer added.
With over 50 million people, mostly residing in remote areas with no bank accounts but most of them have mobile phone accounts hence implying the existence of a huge potential market for financial services.
President John Pombe Magufuli is on record as saying that only 4.7 million Tanzanians out of the total population of over 50 million people, have bank accounts challenging banks to expand their wings to reach rural people.
The Hakika MFB Investment and Credit Committee’s Chairman, Michael Kitulizo thanked Badoer for the investment saying they would utilize the funds to boost its capital and expand its loan portfolio.
“We’ve been struggling to mobilise resources to expand our loan book,” Kitulizo noted, adding: “We really appreciate the trust Badoer has accorded to us by pumping this capital.”
Hakika MFB acting CEO, Elinasha Daniel said her bank had disbursed loans worth 5bn/- since its inception in 2016, with 80 percent of beneficiaries being small-scale entrepreneurs.
Hakika MFB, a private company limited by liability, was established in 2016 by the Arusha Club SACCOS and individual entrepreneurs to offer financial services to the under banked both in the low and middle-income segment.