Tanzania Mortgage Market Record 4.2% Growth in Q1 2016

The Tanzanian mortgage market grew 4.2% in Q1 2016, compared to only 1% in Q4 2015.

Factors attributed to this growth are the increased awareness on mortgage loans among borrowers, as well as the increased competition among lenders.

The results were included in the Q1 mortgage market update for Tanzania by the Tanzania Mortgage Refinance Company (TMRC).

Outstanding mortgage debt as at 31st March 2016 stood at TZS374.5b, compared to TZS359b as at 31st December 2015.

TMRC is a Mortgage Liquidity Facility (MLF) established by commercial banks with support from the Government of Tanzania and the World Bank (WB) to support member banks to extend long-term mortgage loans to the public through provision of long-term funds.

As a result, the number of banks offering mortgage products increased from 3 in 2010 to 26 in 2015, and 27 in 2016.

Currently (2016), the Tanzanian mortgage market is dominated by 5 top lenders, accounting for 70% of the mortgage market.

Equity Bank commands 25% of the mortgage market share, followed by Stanbic (14%), Bank M (12%), Azania Bank (12%) and CRDB Bank (6%).

According to TMRC, the number of mortgage lenders is expected to increase even further as more lenders continue to launch their mortgage loan products.

A key element in the growth of the mortgage market has been the provision of long­-term funding by TMRC, the update indicates.

“[…] With the enactment of the Mortgage Law in 2008 and the establishment of TMRC in 2010, banks have started to be forthcoming with mortgage lending,” Nehemiah Mchechu, Director General of Tanzania’s National Housing Corporation (NHC), said when in conversation with TanzaniaInvest.