MORTGAGE rates are
likely to go down further as Tanzania Mortgage Refinance Company (TMRC)
lowered lending rate to financial institutions to a single digit after
it secured funds at affordable rate.
TMRC Chief Executive Officer, Mr Oscar
Mgaya, told the ‘Daily News’ that the refinancing rate went down to 9.0
per cent from 11.5 per cent which will enable financial institutions to
lower housing loan interest to an average of 16 per cent from 22 per
cent.
“Since we are refinancing financial
institutions at lower rates, they are also expected to reduce the
lending rate to customers,” Mr Mgaya said in an exclusive interview.
TMRC is a private sector financial institution with a sole purpose of
supporting banks to do mortgage lending by refinancing banks’ mortgage
portfolios.
It said on its website that its prevailing
interest rate is 9.0 per cent as it continues to enjoy the 5 per cent
discount from World Bank Funds. The price is fixed at 9.0 per cent for
member banks and at 10 per cent for non-members.
TMRC recently raised over 12bn/- after
issuing a five-year bond through public, which was first tranche of
120bn/- bond following debt market rates to drop considerable. Mr Mgaya
said they will continue to look for affordable sources of fund in a bid
to lower further house interest rate to enable many to build houses
through mortgage finance.
“The lower rates, I believe, will increase
house loans, to give relief home builders from agony of using own
pockets,” Mr Mgaya said. Azania Bank Senior Manager—Retail Banking,
Jackson Lohay, said on average the commercial banks mortgage rates went
down to 16 per cent from 22 per cent.
“Low interest rate for house will enable
many to access house loans and finish construction on time since on
average Tanzanians are building houses for five years using own funds…”
Mr Lohay said during signing of Memorandum of Understanding (MoU)
between TMRC and Tanzania Institute of Bankers last week.
He said since home builders are using
their own means, construction takes more time than anticipated leaving
them with little disposable income. TMRC report showed that six regions -
Dar es Salaam, Mwanza, Arusha, Morogoro, Dodoma and Coast - control 98
per cent of total mortgage loans in the country.
The lower mortgage rates, also, are
expected to increase the country’s ratio of GDP to house loan that
currently stands below 1.0 per cent.
TMRC is a non-deposit taking financial
institution, authorised by Bank of Tanzania (BoT) for the purpose of
conducting its business, and by the Capital Markets & Securities
Authority (CMSA) for the purpose of bond issuance.
Growth of mortgage market in Tanzania
declined last year due to liquidity crunch in the banking system despite
an increase in the number of players, according to a TMRC Tanzania
Mortgage market report.
No comments :
Post a Comment