By Business Insider Reporter
NMB Bank has unveiled guarantee facilities designed to help mining businesses compete for large contracts, offering bid bonds of up to US$11 million without asset collateral, alongside advance payment and performance guarantees of up to TSh11 billion.
The facilities are intended to ease financial constraints that can prevent mining companies and service providers from participating in tenders and fulfilling contractual obligations, potentially opening up larger business opportunities for players in the sector.
Speaking at an NMB Business Executive Network meeting that brought together gold miners and other mining sector stakeholders from Chunya District in Mbeya Region and Songwe, the bank’s Chief of Retail Banking, Filbert Mponzi, said the services were designed to reduce financial barriers facing businesses operating in mining areas.
He said the bank would also continue providing financial education to help customers manage their businesses and make effective use of available opportunities.
Bank guarantees can help businesses meet financial requirements when bidding for contracts or executing projects. A bid bond provides assurance that a bidder will honour its obligations during the tender process, while advance payment and performance guarantees protect contractual interests under agreed terms.
For mining businesses seeking to expand their operations or supply larger mining companies, access to such instruments are important in competing for contracts that might otherwise be beyond their financial reach.
NMB’s Highlands Zone Manager, Wogofya Mfalamagoha, said mining activities had created employment and business opportunities, prompting the bank to strengthen its engagement with stakeholders in the sector.
The discussions also highlighted operational challenges that could constrain the growth of mining businesses, particularly access to equipment and financing.
Gilbo Thomas, representing the Tanzania Mining Services Association (TAMISA), emphasised the importance of access to mining equipment to improve productivity and operational efficiency.
For small-scale miners, the challenge extends to obtaining credit to finance their activities. Saddam Kyando, representing the Mbeya Regional Miners Association (MBEREMA), urged NMB to consider accepting mining licences as collateral for loans.
The proposal points to the need for financing arrangements that take account of the circumstances of small-scale miners, whose ability to secure conventional loans may be constrained by limited acceptable collateral. Miners Fredrick Meshack, Sophia Mwanauta, Mussa Wilfred and Simon Mbalawata welcomed the bank’s customer engagement meetings, saying they provided an opportunity to discuss challenges and identify opportunities for business growth.
