i

www.tib.co.tz

TZS

FUNDS MANAGEMENT SERVICES

1

Funds Management Services This booklet describes the products and services offered by the TIB Development

Bank Ltd under the Directorate of Managed Funds. As a national Development

Financing Institution (DFI), TIB is mandated to drive several initiatives to foster national

economic growth and realize various national development policies and initiatives.

One such mandate is to administer, on

behalf of the Government and other

development partners, funds desired

to achieve specified social and/or

economic objectives or target specific

groups in the economy such as SMEs,

Farmers, Miners, Contractors, etc. In this

regard, TIB established an independent

Directorate known as the Directorate of

Managed Funds to administer the funds

in a manner that assures the fund owners

(principals) commitment, dedication

and independency in management of

their funds at a fee.

2

About the TIB Group

The TIB Group structure includes three

developmental focused institutions

namely the TIB Development Bank Ltd,

the TIB Corporate Bank Ltd and the TIB

Rasilimali Ltd offers innovative products

and exceptional services to its clients

through a ‘one-stop shop’ model hence

delivering convenience and consistency

to the customers.

3

About TIB Development Bank LtdTIB Development Bank Limited was

established in November 1970 initially by

an Act of the Parliamentary, the Tanzania

Investment Bank Act of 1970 with the

main purpose of financing development

with emphasis on the industrialization

of the country. The Bank was able to

fulfill its mandate with notable success

until the macroeconomic instabilities of

the 1980s when the country’s economy

deteriorated and the bank almost

collapsed.

4

The economic reforms of the

1990s highlighted the lack of long

term funding in the economy as

it was not offered by any of the

commercial banks and financial

institutions operating in the country

then. The Government therefore

re-designated TIB as a DFI in 2005.

The Bank completed the process of

transformation into a Development

Finance Institution in 2015 with an

engagement focus centered primarily

on infrastructure, industrialization, oil

and gas, service industry and mining.

5

Mileage and strengths of the bank in fund managementOver the past ten (10) years the bank

has gained useful experiences on fund

management through managing a

number of funds in different sectors and

sub-sectors namely agriculture, energy,

horticulture, mining and water. A total

of thirteen (13) projects worth TZS 895

billion in different sectors have been

managed by the bank over the period as

indicated in the table below:

6

Table 1: Bank’s Fund Management Experience

SN PROJECT NAME NAME OF FUND OWNER SIZE OF FUND

1 Administration of the Rural

Energy Funds

Rural Energy Agency (REA)

in Tanzania

TZS 569.4 billion

2 Administration of Tanzania

Energy Development Access

Project (TEDAP) Credit Line

World Bank –IDA through

Rural Energy Agency (REA).

USD 23.0 million

3 Administration of Credit

Line under Tanzania Rural

Electrification Expansion

Program (TREEP)

World Bank – IDA through

Rural Energy Agency (REA).

USD 42.0 million

4 Agriculture Financing Window

Fund

Ministry of Finance and

Planning

TZS 42 billion

5 Credit Facility and Grants to

Small Scale Miners in Tanzania

Ministry of Minerals and

Energy (MEM)

TZS 2.3 billion Credit

Line and

USD 3.50 million grant

6 Result Based Financing (RBF)

Fund for Rural Solar Market

Development

SNV Netherlands

Development Organization.

EUR 2.2 million

7

SN PROJECT NAME NAME OF FUND OWNER SIZE OF FUND

7 FLORICULTURE Financing Bank of Tanzania (BOT) TZS 48.8 billion

8 Food(meat) Processing

Financing

Bank of Tanzania (BOT) TZS 14.0 billion

9 Revolving Fund Scheme for

supporting water utilities to

expand distribution networks

Ministry of Water

supported by French

Development Agency(AFD)

EUR 2.0 million

10 Accelerating Solar Water

Pumping via Innovative

Financing

Ministry of Finance and

Planning supported by the

World Bank

USD 4.5 million

11 Promotion of bioethanol as

clean alternative cooking fuel

in Tanzania

UNIDO USD 1.1 million

12 Commodity Import Support

(CIS)

Ministry of Finance and

Planning

JPY 1,554,024,203

13 Tanzania Housing Bank (THB) Ministry of Finance and

Planning

TZS 900 million

8

Branch NetworkTIB DFI has a network of four (4) zonal offices

located in Dar es Salaam, Mwanza, Arusha and

Mbeya which ensure delivery of quality services to

fund owners, beneficiaries and other stakeholders

within the shortest proximity possible.

Taking advantage of the group structure designed

to provide all banking services under one roof, TIB

uses its subsidiary TIB Corporate Bank Ltd (TIB CBL)

for provision of banking services to its customers

including of Managed funds’ clients. TIB CBL has

five (5) branches located in Dar es Salaam, Mbeya,

Mwanza and Arusha. Also TIB CBL has a working

a relationship with TPB Bank Plc which allows TIB’s

clients the use of its network across the country

for daily transactions.

9

ServicesThe Directorate of Managed Funds offers

a comprehensive range of services as

narrated below:

(i) Advisory Services

In the context of the Managed Funds

function the bank’s advisory services

focuses at establishing a modality or

approach that enables the attainment

of fund objectives as intimated by the

fund owner. While the fund owner has

a great idea of the desired outcome,

the bank through its advisory service

helps to answer the question of ‘How to’

realize that outcome in an efficient and

sustainable manner.

The tailor -made solutions provided

through TIB Advisory Services to fund

owners include but is not limited to:

10

• Project structuring including

defining the parties to be involved,

roles of each party, relationships

between the parties, and project

institutional arrangement.

• Preparation of project working

documents such as Contracts, Project

Operations Manuals, and Terms of

Reference for the parties involved.

• Identifying target beneficiaries and

facilitating their preparations so

that they can qualify for accessing

the fund in compliance with the

set criteria. In addition, TIB advisory

services define and coordinates

the necessary support needed to

enhance the ability of the target

beneficiaries to access the fund.

(ii) Funds Administration

This is the process of administering

funds based on the terms and

conditions stipulated in the agreement

11

between fund owner (Principal) and the

Bank (Fund Manager/Agent). The role

encompasses the following:

(a) Appraisal:

The bank can undertake appraisal of the

financing proposals submitted by the

target beneficiaries to establish their

viability in line with the expectations of

the fund owners.

(b) Fund disbursement:

Disbursement of fund comprises the

disbursement process to fit the check-

and-balance criteria set to ensure value

for money and realization of the desired

project impact while ensuring timely

availability of the funds needed for

the smooth project implementation.

The process will describe documents

to be submitted, verification to be

undertaken by the bank and obtaining

12

of ‘no objection’ from the fund owner

(if required) prior to making payments

along with ideal timeframes for each

step.

(c) Monitoring and Supervision:

Monitoring and Supervision entails

following through to ensure that the

conversion of disbursed money into

desired assets critical for realizing

fund objectives has been achieved.

This also involves periodic visits to

implementation sites, assessment of site

development against set milestones,

as well as consultations with fund

beneficiaries and implementing

entities such as contractors and service

providers, and reporting to the fund

owner as appropriate. The role may

extend beyond implementation for the

bank to assess operations of the created

asset, provide continuous consultation

to the beneficiary and report to the fund

owner till the specified time or outcome

is realized.

(d) Collection and Recovery:

The Bank can play the role of establishing

arrangements and processes to facilitate

loan repayments where the funds

disbursed to the beneficiaries need to

be rapid as well as following up with the

beneficiaries to ensure that compliance

with set repayment schedules is

observed.

If so desired by the fund owner, the bank

can establish recovery processes to be

followed in case any beneficiary fails to

repay the fund.

13

Pricing GuideThe bank may employ one of the under mentioned approaches to price for fund

management services offered depending on the scope of the assignment and the

preference of the fund owner:

Approach 1: Activity-based Pricing

FEE TYPE FEE RANGE

( VAT Exclusive)

REMARKS

Consulting/Advisory fee

3.0% - 4.0% This fee is charged based on the fund size and scope of the work as per the ToR.

Appraisal fee 0.5% - 1.5% This fee is charged based on the fund size and geographical location/dispersion of beneficiaries.

Disbursement fees 0.5% - 1.5% % of the disbursed amount

Collection fees 1.0% - 2.0% % of the collected amount

Recovery fee 1.0% - 2.5% % of the recovered amount

Retainer fee 2.5% - 5.0% % of the fund size

Reimbursable These are direct costs incurred by the bank in the course of executing the contractual mandate and reimbursed by the principal.

Note: Under this approach, the fee will be charged on each activity to be

undertaken and the range addresses the scope and complexity of the

activity. Only contracted services will be charged for.

14

Approach 2: Man Hour-based Pricing

SERVICES REMARKS

Professional fee This fee is charged for the professional services

offered by the bank employees based on the

number of hours spent on the project and

whether it is on or off site.

Reimbursable These are direct costs incurred in the course of

executing the contractual mandate, incurred by

the bank but reimbursed by the principal

Note: Under this approach, the fee will be based on the number of hours spent

by TIB employee and/or contracted experts for the project on and off site

based on the TIB Man Hour Cost Guide.

15

Offering innovative products and exceptional services to its clients through a ‘one-stop shop’

model hence delivering convenience and consistency to the customers.

16

Head Office:

Mlimani City Office Park Building No.3,

Sam Nujoma Road,

P.O.Box 9373,

Dar es Salaam, Tanzania.

G: + 255 22 2163601/600

E: md@tib.co.tz

W: www.tib.co.tz

Dar es Salaam Zone

Mlimani City Office Park Building No.3,

Sam Nujoma Road,

P.O.Box 9373,

Dar es Salaam, Tanzania.

G: + 255 22 2163601/600

E: md@tib.co.tz

W: www.tib.co.tz

Mwanza Zone Office:

PPF Plaza Building,

3rd Floor – Kenyatta / Station Road,

P. O. Box 1903, Mwanza, Tanzania.

D: 028 2160850

E: mwanzazone@tib.co.tz

Mbeya Zone Office:

Plot No 28 Jakaranda Street,

P. O. Box 2507, Mbeya, Tanzania.

D: +255 25 2502859

G: +255 25 2503522

F: +255 25 2503561

E: mbeyazone@tib.co.tz

Arusha Zone Office:

PPF Plaza Building, Corridor Area

Mezzanine Floor

P.O. Box 2245 Arusha, Tanzania.

G: 0272160251

E: arushazone@tib.co.tz

Contacts

18

www.tib.co.tz