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| Tanzania Mortgage Refinance Company (TMRC) Managing Director, Oscar Mgaya (1st right) receiving a dummy cheque for USD 1 million from SHELTER AFRIQUE Managing Director, James Mugerwa (second left) at an event to announce the SHELTER AFRIQUE investment of USD 1 million equivalent to an 11.06% stake in TMRC. The occasion was held in Dar es Salaam on Friday last week. Looking on from left are TMRC Chief Financial Officer, Oswald Urassa and company’s Head of Operations and Information Technology, Shabani Mande. |
Speaking during the hand over ceremony of a dummy cheque of the $1M USD facility to the Tanzania Mortgage Refinance Company in Dar es Salaam over the weekend, TMRC Managing Director, Oscar Mgaya said that the partnership between two firms assured Shelter to obtained almost 11.06% percent in the TMRC stake.
“We are glad to see some action are being taken by various stakeholders to revive mortgage financing in the country.” “The government through the Ministry of Finance, Ministry of Housing and Human Settlement and Central Bank with the support of the World Bank spearheaded the reintroduction of mortgages in Tanzania,” he said.
He said that through the government intervention in the sector new laws have been enacted such as the Mortgage Finance Act, Condominium Act and Liquidity Facility which pave the way for the sustainable development of the housing sector in Tanzania.
Mgaya underscored that the most huge challenges faces by the stakeholders in the industry is the introduction of 18% percent of Value Added Tax (VAT) which increases the cost of acquiring a house to individuals and makes mortgages uneconomical.
He said that the high cost of transfer and delays in the process which also makes it difficult for house owners to mortgage their houses including a long public and stakeholder’s outcry of widespread land dispute across the country.
Mgaya pointed out about the Mortgage Liquidity Facility (MLF) which aims at supporting members of the banks to extend long term mortgage loans to the public through the provision of the long term funds.
On his part, SHELTER AFRIQUE, Managing Director, James Mugerwa said that his company is a Pan African real estate and construction financier that has been in operation for over 32 years.
“We were created by the African Development Bank (AfDB) as the premier housing finance institution on the continent and with a mandate to make housing more affordable and help member states close their housing deficits,” he noted.
He said that Shelter comes at a right time to contribute to the burgeoning housing market in Tanzania and however, they are very interesting in projects of scale and the development of land for the purposes of ensuring the two countries have sound economic indicators.
“As an investor we were attracted to the TMRC model because of its dominant market position; TMRC is the only wholesale lending company to the housing finance market; we were also encouraged by the strong support it enjoys from the government,” he added.
Mugerwa noted further that as home ownership increases, there will be indirect benefits to other sectors such as construction, insurance, legal and other professional services in the East African region.
TMRC started operations in 2011 and has issued loans worth TZS 34.1 billion to member banks to refinance mortgage portfolios, to date TMRC has 14 shareholders namely Exim, NMB, CRDB, NBC, Azania, TIB, DCB, NIC, ABC, PBZ, BOA, I&M Bank, NHC and SHELTER AFRIQUE.
Shareholders have contributed a total paid up capital of TZS 16.86 billion while twelve 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.
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