4 June 2018

Tanzanian Home Lenders Boosted With $52m Bond

The Tanzania Mortgage Refinance Company (TMRC) is issuing a five-year medium term note worth Tsh120 billion ($52.6 million) with the first tranche of Tsh12 billion ($5.26 million) expected this month.

TMRC provides long-term funding to financial institutions for mortgage lending.

Ammish Owusu-Amoah, chairman of the TMRC board, said at the launch that the timing is right considering the decline in interest rates. He said the company was earlier unable to issue the note because it would have proved too expensive for its customers, the primary mortgage lenders.

High demand

"In December 2014, the weighted average yield for 182-day Treasury bills was 15.5 per cent whereas that for the 5-year Treasury bonds was 16 per cent. But by May 2018, it had declined to 12.67 per cent for the 182-day Treasury bill and 11.06 per cent for the 5-year paper.

TMRC chief executive Oscar Mgaya said the capital market was one their sources of raising funds as the firm does not take deposits or lend directly to individuals.

Demand for housing and housing loans in the country is high.

Data from the Bank of Tanzania shows that the housing deficit is three million units, with a 200,000-unit annual demand.

"Compared with its neighbours, Tanzania has a relatively smaller mortgage market, although it is growing rapidly. At the end of the first quarter of 2017, mortgage debt outstanding as a proportion of GDP was around 0.46 per cent, but growing rapidly," the BoT said.

Tanzania

Ernst & Young Questions Tanzania's 2018/2019 Budget

Global professional services firm Ernst & Young has questioned the effectiveness of Tanzania's fiscal year 2018/19… Read more »

See What Everyone is Watching

Copyright © 2018 The East African. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 800 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.