Tanzania Mortgage Refinance Company (TMRC) is a Mortgage Liquidity Facility operating in Tanzania. As a specialized financial Institution that provides long-term funding to financial institutions for the purposes of mortgage lending, the TMRC is a private sector institution owned by Banks and Non-Bank Institutions.
Tanzania Mortgage Refinance Company (TMRC) is a financial institution owned by Banks and Non-Bank Institutions with the sole purpose of supporting banks to do mortgage lending by refinancing banks’ mortgage portfolios.
Currently, TMRC has fourteen shareholders namely CRDB (14%), NMB (11%), EXIM Bank (7%), Azania Bank (12%), TIB Development Bank (9%), BancABC (6%), DCB Commercial Bank (7%), NBC (6%), BOA (6%), I&M Bank (3%), PBZ (3%), NIC Bank (3%), NHC (3%) and Shelter Afrique (11%). Each of the above institutions has subscribed to the issued share capital of the company with the minimum of TZS 500 million.
TMRC has the objective of supporting financial institutions to do mortgage lending by refinancing Primary Mortgage Lenders’ (PMLs’) mortgage portfolios. This type of lending is also known as wholesale or secondary market lending. TMRC will neither take deposits nor lend directly to individuals. TMRC will refinance mortgage loan portfolios rather than individuals mortgage loans and cater to banks rather than individual borrowers.
As the balance sheet of TMRC grows, shareholders will be expected to increase their capital in the company. There are no restrictions on other banks or other eligible institutions to participate in the equity of TMRC. The company is an ‘open club’ with no restrictions on entry for eligible investors.
To become the preferred secondary market intermediate for mortgage financing in Tanzania.
To expand home ownership in Tanzania by providing long term financing to primary mortgage lenders.
“Home ownership through financial intermediation”
TMRC Core Values
- Passion and
TMRC’s business strategy would involve the following phases:
Phase 1 – Initial years of operations, TMRC will refinance the loans of banks using the World Bank Loan and shareholders’ equity. The World Bank loan of USD 30 millions will be advanced to member banks through TMRC whenever required by Bank of Tanzania in Tanzania Shillings equivalent.
Phase II – From the later years onwards, after exhausiting the World Bank loan, TMRC will be funding its operations from a combination of both the remaining shareholders’ equity and by issuing corporate bonds in the capital market. The bonds issued by TMRC will be plain vanilla bonds with semi-annual interest payments and bullet repayment.
The TMRC’s partners are the World Bank, Bank of Tanzania, and Commercial Banks.
Currently, TMRC has fourteen shareholders: CRDB Bank, National Microfinance Bank (NMB), EXIM Bank, Tanzania Investment Bank (TIB), National Bank of Commerce (NBC), Azania Bank, Dar-es-salaam Community Bank (DCB), BancABC, I&M Bank, NIC Bank, NHC and Shelter Afrique.
In this first phase of its operations, TMRC will refinance the loans of banks using a World Bank Loan and shareholders’ equity. The World Bank loan of USD 30m will be advanced to TMRC by the Bank of Tanzania in TZS equivalent. Subsequently, in its second phase, the TMRC will be funding its operations from a combination of both the remaining balance of the World Bank Loan and by issuing corporate bonds in the capital market.
As the balance sheet of TMRC grows, shareholders will be expected to raise its capital. There should be no restrictions on other banks or other eligible institutions participating in the equity of TMRC. The company is an ‘open club’ with no restrictions on entry for eligible investors. So far TMRC has 14 shareholders namely: CRDB, AZANIA, TIB, EXIM, NMB, DCB, NIC, ABC, NBC, PBZ, BOA, I&M, NHC & Shelter Afrique. Each of the above banks has subscribed to the issued share capital of the company with the total paid up capital of TZS 16.9 billion.
TMRC's existence may also lead to the establishment of specialized housing finance companies in the private sector.
This has been evidenced in Egypt where at least four such companies got established once the mortgage liquidity company was established there in 2006. TMRC can also facilitate increased competition in the mortgage market by creating a longer term funding source.
The TMRC has the following project goals / expectations:
- Provision of secure long term funding at attractive rates to member banks to continue lending to their clients
- Lowering the cost of funds, which can lead to a lowering of mortgage rates, thereby improving affordability and extending the range of potential borrowers
- Facilitating member banks to extend the mortgage maturity to be in line with normal mortgage products
- Contribute to the growth of Tanzanian capital markets through the issuance of TMRC bonds to source funds for long term lending to member banks
- Assist in the standardization of mortgage practice in Tanzania through specialized training to member banks on the origination of mortgages
- Facilitating the entry of new mortgage lenders in the market due to the existence of MLF which guarantee the funding of mortgage portfolios