As at 30 September 2016 total lending by Tanzania’s banking sector for the purposes of residential housing was TZS404.42b, compared to TZS359b in December 2015 (+13%).
Factors attributed to this growth are the increased awareness on mortgage loans among borrowers, as well as the increased competition among lenders (2 new lenders have entered the market during the first three quarters of 2016).
The increased awareness on mortgage loans among borrowers is a result of various public awareness campaigns by banks offering the mortgage loan product.
TMRC notes that the number of mortgage lenders is expected to increase further as more lenders continue to launch their mortgage loan products.
“Compared to other countries in the region Tanzania still has a relatively smaller mortgage market, although it is growing rapidly. Mortgage debt outstanding as a proportion of Tanzanian GDP was around 0.44% as at the end of the third quarter of 2016. This is lower than its East African neighboring countries but growing at an accelerated pace,” the update indicates.
The update also notes that a key element in the growth of the mortgage market in Tanzania continues to be the provision of long term funding both in the forms of refinancing and pre-financing by TMRC.
TMRC is a financial institution co-founded by the Tanzanian Government and the World Bank in 2010 to support member banks to extend long-term mortgage loans to the public through provision of long-term funds.
Source: TanzaniaInvest
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