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ON 22ND MAY 2015.
Fellow Colleagues,
Members of the Press,
Invited Guests,
Ladies and Gentlemen
I am very happy to participate in this great occasion to celebrate another
milestone for TMRC and Shelter Afrique who is our newest shareholder. I would
like to thank Shelter Afrique CEO Mr. James Mugerwa and his team for the
partnership that we have achieved together. I would also like to thank the
members of the press for being here with us today and more importantly for the
important work they have of informing the general public. Today, symbolises an
important day in which Shelter Afrique joins TMRC as its 14th shareholder.
SHELTER AFRIQUE is investing USD 1 million and taking an 11.06% stake in TMRC.
Ladies and Gentlemen,
We are glad to see some actions are being taken by various stakeholders to revive
mortgage financing.
The Government of Tanzania through Ministry of Finance, Ministry Housing and
Human Settlement and Bank of Tanzania in collaboration with commercial banks
and with the support of the World Bank spearheaded the reintroduction of
mortgages in Tanzania.
To date, new laws have been enacted such as Mortgage Finance Act,
Condominium Acts and Mortgage Liquidity Facility has been established. This is
Tanzania Mortgage Refinance Company (TMRC), the institutions I am proudly
Ladies and Gentlemen,
TMRC is a Mortgage Liquidity Facility (MLF) established by commercial banks with
support from the Government of Tanzania and the World Bank with the aim of
supporting member banks to extend long-term mortgage loans to the public

through provision of long-term funds. TMRC is a specialized financial Institution

that provides long-term funding to financial institutions for the purposes of
mortgage lending. TMRC is a private sector institution owned by banks and other
institutions in the housing sector. 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 is neither taking deposits nor lending directly to
individual borrowers. TMRC refinances mortgage loan portfolios rather than
individuals mortgage loans and caters to banks rather than individual borrowers.
Ladies and Gentlemen,
To date TMRC has fourteen (14) shareholders namely Exim, NMB, CRDB, NBC,
TMRC shareholders and have contributed a total paid up capital of TZS 16.86
billion. Twelve (12) of these shareholders are also TMRC members banks who
have access to borrow long term funds from TMRC for the purpose of on-lending
the same to their customers. In addition to the paid up capital from the
shareholders, TMRC also has additional available funds from the Government of
Tanzania through Bank of Tanzania (BOT) in the tune of TZS 100 billion. These
funds are being used for the purposes of lending to the member banks.
TMRC started operations in 2011 and has issued loans worth TZS 34.1 billion to
member banks to refinance mortgage portfolios, it has organized various training
including overseas study tours for member banks to learn from other countries
advanced in this sector, it has been encouraging member banks to team up with
real estate developers to work on big housing projects.
Ladies and Gentlemen,
The primary role of TMRC as a Mortgage Liquidity Facility is to elongate mortgage
tenors and therefore making mortgage loans more affordable. I am happy to
report that the existence of TMRC has resulted into availability of longer tenor
mortgage loans. Currently, mortgage loans tenors are 15 to 20 years compared to
5 to 7 years in the past. The availability of long term funding from TMRC has also
attracted more banks to take up mortgage lending and as a result creating
competition among banks. The number of banks offering mortgage loans has
increased from 3 banks to 20 banks. The increased competition has helped to
marginally reduce the interest rates from above 20% to an average of 18%.
According to data from Bank of Tanzania, the size of the outstanding mortgage
debt grew by 59% in 2014.
Ladies and Gentlemen,

Much as actions to revive mortgage financing have started yielding positive results
including more banks venturing into mortgage financing, the sector still faces
some challenges which need to be addressed by the stakeholders. Among them
Introduction of VAT on sale of properties (which increases the cost of
acquiring a house significantly and make mortgage uneconomical)
High cost of transfer and delays in the process (which makes it difficult for
house owners to mortgage their houses)
Widespread land dispute;
Volatile macro economic environment which makes interest rates
Low literacy levels which makes too risky to lend long term to people with
little knowledge of how mortgage financing works
Most of these challenges can be addressed if all stakeholders in the housing sector
work together to make mortgage financing in Tanzania grow and contribute
positively to the economy.
Ladies and Gentlemen,
We are very excited that SHELTER AFRIQUE has joined us and the other
shareholders/member banks in the quest to develop the mortgage market in
Tanzania. We believe that in a long run the availability of mortgages will have a
very positive impact on the availability of housing for more Tanzanians.

Thank you.