Arusha. Dubai-based billionaire Ricardo Badoer has made a major foray into Tanzania’s microfinance sector to unleash its untapped potential.
Mr Badoer, who is the founder of Badoer Investments Limited, has pumped in over Sh2.2 billion ($1 million) into Arusha-based Hakika Microfinance Bank (Hakika MFB).
The transaction, which was approved by the Bank of Tanzania, makes Mr Badoer the majority shareholder with a 20 per cent stake in the country’s key small and medium-entrepreneurs’ financier.
“I’m extremely humbled to be part of Hakika MFB. I like the value and idea of lending to SMEs that are struggling to secure capital to expand their businesses,” said Mr Badoer when receiving the share certificate in Arusha over the weekend.
The win-win-deal, would not only see the Hakika MFB capital base boosted to Sh5.7 billion, but would also witness billionaire Badoer taking up a seat on the board of the bank.
“My mission is to ensure Hakika MFB introduces mobile and online services to reach out to most of the rural population,” he explained.
He hinted at plans to elevate Hakika MFB into a fully-fledged commercial bank in the near future. Tanzania’s Hakika MFB becomes the second entity to be acquired in the East African region by Mr Badoer after he invested $1 million (Ksh100 million) in Sumac Microfinance Bank to purchase a 15.6 per cent stake in the firm based in Nairobi, Kenya, in the recent past.
“I’ve fallen in love with the East African market because the middle class is contending with low financial service penetration. There is a huge untapped potential,” Mr Badoer noted.
In Tanzania over 50.3 million people, mostly in remote areas have no bank accounts and rely on informal means, implying the existence of a huge potential market for financial services.
President John Magufuli is on record as saying that only 4.7 million Tanzanians out of 55 million people have bank accounts, imploring banks to spread their wings to reach more rural populace.
The Hakika MFB Investment and Credit Committee chairman, Mr Michael Kitulizo, expressed gratitude, saying they would utilise the funds to boost capital, as they were seeking to expand their loan book in the near future.