Tanzania: Banks receive €16 million to boost mortgage lending
The Tanzania Mortgage Refinance Company Limited (TMRC) has extended loans by Sh34 billion (€16 million) to its member banks in a bid to increase mortgage lending.The Tanzania Mortgage Refinance Company Limited (TMRC) has extended loans by Sh34 billion (€16 million) to its member banks in a bid to increase mortgage lending.
TMRC's chief executive officer Oscar Mgaya told Tanzania Daily News that seven banks have so far borrowed from the mortgage company, namely CRDB, Azania Bank, Bank of Africa, EXIM Bank, BancABC, I&M Bank and DCB Commercial Bank.
He added that since the creation of TMRC, mortgage loans' average duration went from 5-10 years to 15-20 years.
"Furthermore. the number of institutions offering mortgage loans has increased from three to 19 banks, while interest rates have dropped from 22 per cent in 2010 to 16 per cent now - due to increased competition," he explained.
The TMRC was formed as part of an initiative by the Tanzanian government and the World Bank to increase citizens' access to mortgages in the country.
It is one of the three components of Tanzania's Housing Finance Project (HFP) which is geared towards the development of the mortgage market in Tanzania, along with the development of housing microfinance and the expansion of affordable housing supply.
According to a report published by the Bank of Tanzania, the country's mortgage market recorded an annual growth of 46 per cent in 2013 and it is expected to grow at the same pace in 2014.