The government of Kenya is set to initiate new financing impetus aimed at creating a friendly environment in the mining industry and boosting the sector’s investment and contribution to the economy.
The new dawn was marked by NMB Bank that became the first lender to launch a special mining club to cater for the unique financial needs in the extractive industry, including offering sectoral players soft loans. The mining club initiative aligns well with the sixth phase government endeavour to support the establishment of a thriving mining sector, which President Samia Suluhu Hassan has supported in many ways during her first 100 days in office.
Through this initiative, NMB Bank targets to increase credit to the mining sector to over 200bn/- by 2025. Already loans amounting to 63bn/- had been extended to the mining borrowers by May this year. The fresh impetus into the mining sector is good news for over 1.5 million artisanal miners in the country, who have for long been considered not viable for lending by commercial lenders.
NMB Mining Club
Minerals Minister, Dotto Biteko said at the launch of the NMB Mining Club is an innovative financial inclusion platform of its kind in the country, adding that it was such creativity, which makes the NMB market leader in many aspects.
“NMB Mining Club is a commendable initiative and top-class creativity to lure new customers and serve the mining sector that has huge business potential for banks. I am grateful NMB has shown us that local lenders no longer fear working with the mining sector,” said Biteko.
The Chief Credit Officer of NMB Bank, Mr Daniel Mbotto, said the club, which already has 200 members in the central zone, will contribute towards the attainment of that goal through streamlined and special lending like asset financing.
Mining licences as collateral
“We strongly believe mining stakeholders will seize this opportunity and capitalize on the many advantages it offers for their prosperity and productivity of the sector,” Mr Mbotto said.
NMB Mining Club is a network of the bank’s mining sector customers and other stakeholders, which is initially earmarked for six areas, starting with Dodoma and Kahama that will be followed by Mwanza, Chunya, Morogoro and Arusha.
The club inauguration-cumworkshop was also organized to highlight the bank’s performance and its financial solutions like the banc assurance service offered in partnership with 10 insurers – namely Jubilee General Insurance and Jubilee Life, Reliance, UAP, Britam, Metropolitan as well as NIC, ZIC, Alliance Life and Sanlam. The head of Business Banking at the bank, Mr Alex Mgeni, called on the government to help them serve artisanal miners by addressing several issues like allowing the lender to use their mining licences as collateral.