Tanzania Mortgage Refinance Company Limited (TMRC) has lent out Tshs 41.1 billion to its member banks for mortgage lending.

Tanzania Mortgage Refinance Company Limited (TMRC) has lent out Tshs 41.1 billion to its member banks for mortgage lending.

“To-date, seven member banks namely Azania Bank, Bank of Africa, EXIM Bank, DCB Commercial Bank, CRDB, I&M Bank and BancABC have borrowed from TMRC,” the TMRC Chief Executive Officer, Mr. Oscar Mgaya, said.

These banks which are also shareholders for the Tanzania Mortgage Refinance Company Limited (TMRC) seek to make mortgaging easy, a move meant to help the country’s citizens build and own affordable and decent housing units.

The 14 TMRC shareholding institutions are National Microfinance Bank (NMB), CRDB Bank Plc., National Bank of Commerce (NBC), EXIM Bank, Azania Bank, Tanzania Investment Bank (TIB), DCB Commercial Bank Plc., NIC Bank, Banc ABC, The People’s Bank of Zanzibar (PBZ),Bank of Africa Tanzania (BOA), I&M Bank, NHC and Shelter Afrique.

According to Mr. Mgaya, the room is still open for other shareholders to own a stake in the company.

“There are 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,” he said.

The TMRC was formed as part of the Government of Tanzania and the World Bank initiative to streamline citizens’ access to mortgages in the country.

The formation TMRC 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. The other two components of HFP are development of housing microfinance and expansion of affordable housing supply.

TMRC is currently utilizing a World Bank loan from the government to refinance its member banks. TMRC access these funds through a line of credit from Bank of Tanzania.

TMRC also plans to issue corporate bonds to raise funds to lend to its member banks in an ongoing basis. Institutions similar to TMRC have proved to be instrumental in financial development of other countries.  TMRC is expected to play a similar role as Cagamas in Malaysia and Egyptian Mortgage Refinance Company (EMRC) in Egypt.

Getting a mortgage in Tanzania used to be very difficult because most banks did not offer the product.  Most banks were not attracted to the mortgage product due to lack of long term funds which TMRC is now providing to the banks.  “Today, there are 12 banks offering mortgage loans compared to 3 banks just 3 years ago,” said Mr. Mgaya.

Source: https://www.corporate-digest.com/