Tanzania drums for more low-income-centred mutual funds

DAR ES SALAAM: THE government yesterday launched a mutual fund that targets the low-income bracket, a move envisaged to accelerate financial inclusion in the country.

The collective scheme, Timiza Fund, introduced by Zan Securities, one of the leading stock brokerage firms, is the first private sector mutual fund and the third in the market.

The sector is led by UTT-Amis, which is fully owned by the government.

The fund introduction by a private player symbolises the government’s tireless efforts to widen the participation of society in financial products, making the sector equally accessible to all walks of life.

“This fund will help elevate the degree of financial inclusion in the country by motivating numerous citizens, especially income earners, to engage in capital market investments,” Deputy Minister for Industry and Trade Exaud Kigahe said on behalf of Planning and Investment Minister, Prof Kitila Mkumbo.

“Because the fund’s unit is merely 100/- for a minimum of 100 units… this comes to a minimum investment of 10,000/- which is affordable for the majority,” Mr Kigahe said while gracing the launching ceremony.

Also read: UTT fund value balloons by 50pc in one year 

He said the fund, aimed to raise 10bn/-, is in line with the policies and measures taken by the government to include citizens in investment in economic activities centered on improving their income, especially bodaboda riders and food vendors (mama ntilie).

Zan Securities Chief Executive Officer Raphael Masumbuko said that opportunities for economic progress should not just be accessible to a select few but should instead be open to everyone, regardless of financial status.

“Collective investment plays an important role in making the investment belong to all by providing a platform where people can pool their resources together to obtain a controlled concentration of assets,” Mr Masumbuko said.

The profile of the Timiza scheme is a balanced portfolio investment in both fixed-income securities and listed equities to reduce potential volatility.

The fixed-income securities will comprise at least 0-100 per cent of the portfolio, while 0-50 per cent will be in listed equities.

“The biggest advantage of collective investment is its cooperation as it accommodates both experienced and inexperienced investors,” he said.

Timiza units are open-ended with exit and entry loads after the initial sale, depending on the net asset value (NAV) per unit at that point.

Capital Market and Securities Authority (CMSA) Chief Executive Officer Mr Nicodemus Mkama said the specific objectives of the Fund are to empower Tanzanians from different cadres, including the youth, women, and special groups, to benefit from the financial sector, build a culture of saving and investing among Tanzanians to enable citizens to participate in the economy.

“This is a very important step for encouraging the participation of investors from different cadres, including low-income citizens,” he said.

Mr Mkama stated that in ensuring the objectives of the Fund are met, the CMSA has approved lowering the amount for participation in this Fund from 1.0m/- to 10,000/- only.

Mwanga Hakika Bank’s Managing Director Mr Jagjit Singh said as the custodian bank, they will play their role with the highest level of transparency by practicing good corporate governance and ensuring strict compliance with applicable laws and regulations.