World Bank Country Director, Bella Bird said in statement while responding to Property Watch questions on the subject that, it expects the 25bn/- of the amount which was yet to be disbursed by December last year to be exhausted by June this year.
“As of December 2018 the component, that TMRC involves had an undisbursed amount of 25bn/-. There have been further disbursement after December 2018 and we expect the financing will be fully utilized before the closing date. The project is on track to be completed as planned,” said Bird.
She further noted that the Tanzania Housing Finance Project which was established with World Bank’s initial U$40 million loan, has succeeded to meet its objective of developing a housing fiancé market in the country. TMRC was also expected to provide medium and long term liquidity to lenders.
“The Tanzania Mortgage Refinance Company plays the catalytic role for one of three pillars of the project. TMRC, as the wholesale financial institution specialized for mortgage pre-and re-financing, offers the credit to primary mortgage lenders (i.e. commercial banks),” the World Bank’s Country Director added.
TMRC was given additional financing of $60 million in February 2015 with a revised closing date of June 2019, Bird explained.
Established by The Mortgage Finance (special provisions) Act of 2008, the TMRC is credited with lowering interest rates charged by lenders for medium and long term borrowers who invest in real estate.
According to TMRC year report of 2016 when it was last issued, the mortgage repayment periods have also been extended from seven to 20 years while average loan size also increased from 69m/- in 2014 to 75m/-.
“Akiba, EFC and DCB who target lower income customers had much lower average mortgage loan sizes than the likes of Stanbic Bank whose average loan size was 271m/-,” the report stated.
The TMRC which is under Bank of Tanzania said another initiative set up under the Housing Microfinance Project (HFP) is the Housing Microfinance Fund (HMFF) which is geared to providing long-term loans for lower income earners who currently lack access to housing finance.
This has marked the first step towards significant progress of the microfinance sector with 3bn/- disbursed to DCB Commercial Bank Plc. TMRC currently has over 20 borrowing members although some them, including the country’s second largest mortgage lender, Bank M being acquired by Azania Bank Limited after failing to meet Bank of Tanzania regulatory conditions.