According to Tanzania Mortgage Market
Update by the Bank of Tanzania (BoT), total lending by banking sector
for the purposes of residential housing was 404.42bn/- which is
equivalent to 185 million US dollars representing a decline of 16
percent from total mortgage lending of 481bn/- for June 2016.
“The decline recorded in the third
quarter of the year was mostly attributed to corrections made on
reporting by banks where some commercial property loans were removed to
only report residential mortgage loans,” stated the report. Likewise,
the number of mortgage accounts declined from accounts 3,627 reported in
the second quarter to 2,981 accounts as at end of Q3 2016.
For the first three quarters this year,
mortgage market registered a growth rate of 13 percent with an annual
growth rate of 13 percent through September 2015 to September 2016.
However, despite the decline in the
third quarter, the overall year to date growth has been attributed to
factors such as increased awareness on mortgage loans among borrowers as
a result of various public awareness campaigns by banks offering the
mortgage loan product as well as increased competition as new lenders
enter the market.
As at end of the third quarter of 2016,
28 different banking institutions were offering mortgage loans, with no
new entrants in the market after the entrance of Diamond Trust Bank
during the second quarter of 2016.
The number of mortgage lenders is
expected to increase further as more lenders continue to launch their
mortgage loan products. During the quarter, the mortgage market was
dominated by five top lenders, who amongst themselves command about 68
percent of the mortgage market.
Equity Bank was a market leader
commanding 24 percent of the mortgage market share, followed by Stanbic
Bank (14 percent), Bank M (13 percent), Azania Bank (11 percent) and
CRDB (6 percent). More positive developments are expected in the market
with more banks now launching their mortgage loan products as
competition in the traditional banking products continues to intensify.
Whereas large banks such as National
Microfinance Bank (NMB), CRDB and National Bank of Commerce launched
their mortgage products in previous years, Standard Chartered Bank and
Diamond Trust Bank which ranked 4th and 7th respectively in terms of
banking sector market share in 2015 have entered the market during the
first half of 2016.
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