Tanzania: Bank Ventures into mortgage market
CRDB Bank has entered the mortgage market, which has thus far been underdeveloped in Tanzania.CRDB Bank
has entered the mortgage market, which has thus far been underdeveloped in Tanzania.
This should help solve the housing shortage issue faced by the country: only 0.5 per cent of the three million units annual demand is filled currently.
has just launched Jijenge, a new house loan scheme to be repaid within a period of up to 20 years, unlike the bank's previous house loan schemes that could only be repaid in a period not exceeding five years.
The interest rate for Jijenge is 18 per cent plus one per cent insurance cover for death or injury that would stop the borrower from repaying the loan. This insurance scheme is what the bank needed to accept the long-term risk.
The National Housing Corporation (NHC) Director of Regional Operations and Administration Raymond Mndolwa said the loan repayment of 20 years is flexible and attractive for potential borrowers: "If NHC, the main market player, throws its full weight on real mortgage business, we are sure to see others following suit. NHC cannot build new homes unless it has sufficient money", he declared.
Potential borrowers must prove a basic monthly salary of no less than 80 per cent of the total house cost, as per the Tanzania Mortgage Regulation Act of 2011.