The World Bank (WB) approved on February 24, 2015 USD 60 Million in new financing to help Tanzania develop a viable mortgage finance market for affordable housing.
The project, which is being implemented by the Bank of Tanzania (BOT), is also delivering a comprehensive capacity building program on the mortgage market targeting service providers, financial intermediaries, market professionals, policy makers, regulators, government authorities, the judiciary and the general public.
“Tanzania’s rapid urbanization in recent years has underscored the urgency to improve access to finance for affordable housing,” says Philippe Dongier, World Bank Country Director for Tanzania, Burundi and Uganda.
The financing will come from the World Bank’s International Development Association (IDA), established to help the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives.
The new financing will build on the achievements of the ongoing 2010 Housing Finance Project (HFP) and brings the total IDA investment in the project to USD 100 million.
The HFP has overseen the establishment of the Tanzania Mortgage Refinancing Company (TMRC) which is playing a key role in developing the mortgage market in the East African country.
According to Oscar Mgaya, CEO of TMRC “The biggest investment opportunity in housing in Tanzania is in housing supply side especially in affordable housing. There is a huge demand for housing and very few private housing developers in Tanzania.”
TMRC was setup in 2010 and as of 31st July 2013, it had already issued loans to its’ 11 member banks in Tanzania totalling TZS 11.95 billion.