Tanzania: High Lending Rates Affect Housing - Bank of Tanzania

May 26, 2017 | The Citizen; All Africa

In Tanzania, high lending rates negatively affect the supply of housing and imply more financial instruments such as bonds, mortgage, private equity and long-term products.

High lending rates of 16-21 per cent are constraining efforts to acquire loans for housing construction, a Bank of Tanzania (BoT) official has said. It is small wonder that the supply of housing is inadequate, said BoT Microfinance Supervision manager Eliamringi Mandari. He hopes long-term financing instruments will provide long-term liquidity options for financing of mortgage loans. To tackle the challenge, BoT underscores the importance of strengthening financial and capital markets to provide long-term funds. That can be done by using instruments such as private equities and bonds. Mortgage finance is a debt instrument secured by the collateral of specified real estate property normally known as loan for acquiring improved or constructed residential property. So, mortgage developers and financiers have to consider housing needs of lower- and middle-income people. Read more on All Africa. Source: All Africa