The government has introduced a new mutual fund targeting the low-income bracket, a strategic move aimed at accelerating financial inclusion across the country. The Timiza Fund, launched yesterday by Zan Securities, marks the first private sector mutual fund and the third overall in the market, which is currently led by the state-owned UTT-Amis.
This initiative underscores the government’s commitment to broadening access to financial products, ensuring inclusivity across all segments of society. Deputy Minister for Industry and Trade, Exaud Kigahe, speaking on behalf of Planning and Investment Minister Prof. Kitila Mkumbo, highlighted the significance of this development. “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,” Kigahe stated at the launch ceremony.
The Timiza Fund aims to democratize investment opportunities with a minimum unit price of just 100/- and a minimum investment threshold of 10,000/-, making it accessible to a vast majority of the population. The fund targets raising 10 billion/- and aligns with government policies designed to involve citizens in economic activities that enhance their income, particularly benefiting groups such as bodaboda riders and food vendors (mama ntilie).
Raphael Masumbuko, CEO of Zan Securities, emphasized the importance of inclusive economic opportunities. “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,” Masumbuko explained. The Timiza Fund features a balanced portfolio, investing in both fixed-income securities and listed equities to mitigate potential volatility. The fixed-income securities will constitute 0-100% of the portfolio, while listed equities will make up 0-50%.
The open-ended structure of Timiza units allows for flexible entry and exit, with transaction loads based on the net asset value (NAV) per unit at the time. Nicodemus Mkama, CEO of the Capital Market and Securities Authority (CMSA), outlined the Fund's objectives, which include empowering Tanzanians from various backgrounds, fostering a culture of saving and investing, and enabling broader economic participation.
“This is a very important step for encouraging the participation of investors from different cadres, including low-income citizens,” Mkama said. He noted that the CMSA has approved reducing the minimum participation amount from 1.0 million/- to just 10,000/-, enhancing accessibility.
Jagjit Singh, Managing Director of Mwanga Hakika Bank, the custodian bank for the fund, pledged the highest level of transparency and adherence to good corporate governance practices. He assured strict compliance with all applicable laws and regulations, reinforcing the integrity of the fund's management.
The launch of the Timiza Fund represents a significant milestone in the government’s efforts to foster financial inclusivity and economic empowerment for all citizens.