Dar es Salaam. The Equity for Tanzania Limited (EFTA) corporate bond has closed with strong results after raising Sh33.04 billion, surpassing its initial target of Sh15 billion and achieving a subscription rate of over 220 percent.
The performance marks a notable step in Tanzania’s capital markets, reflecting growing investor appetite for structured financial instruments linked to productive sectors of the economy.
The bond is part of EFTA’s broader programme to raise up to Sh50 billion through multiple tranches. The first issuance attracted both retail and institutional investors, underlining increasing demand for stable, income-generating investment options.
EFTA chief executive officer Nicomed Bohay said the outcome reflects confidence in the institution’s investment approach, particularly its focus on financing sectors that support economic growth and job creation.
The strong uptake points to a shift in market behaviour, with more investors turning to bonds offering competitive and predictable returns.
Offering an annual interest rate of 14 percent, payable semi-annually, the EFTA bond has positioned itself as an attractive option in a market where structured investment opportunities tied to the real economy remain limited.
Proceeds from the bond are expected to finance productive assets for small and medium-sized enterprises (SMEs), especially in agriculture, manufacturing and trade.
These sectors are widely recognised as key drivers of employment and economic expansion.
Through its asset-based financing model, EFTA enables businesses to acquire machinery, vehicles and equipment without relying on traditional collateral.
This approach is expected to widen access to capital, particularly for underserved entrepreneurs.
Economists say such financing could improve productivity, strengthen value chains and accelerate the growth of SMEs, which are central to inclusive development.
The bond’s success also highlights the expanding role of capital markets in supporting economic activity.
Analysts note that it may encourage more companies to raise funds through similar instruments, reducing overreliance on bank lending while promoting financial innovation.
However, experts emphasise that effective use of the funds will be crucial. Strong risk management systems, careful project monitoring and transparency in reporting will be necessary to sustain investor confidence.
Overall, the EFTA bond underscores the potential of Tanzania’s capital markets to mobilise resources for productive investment.
If well managed and supported by a stable policy environment, such initiatives could play an important role in driving long-term economic growth.
