Tanzania Mortgage Market Grows 5% in Q1 - BoT

By Josephine Christopher

Dar es Salaam — In the first quarter that ended March 31, this year, Tanzanian mortgage market registered a 5 percent growth in the

value of mortgage loans, the central bank revealed.

The outstanding mortgage debt as at March 31, 2020 stood at Sh436.02 billion compared to Sh414.79 billion value recorded as of March 31, 2019, the Tanzania Mortgage Market Update states.

The update, which was issued in July by the Bank of Tanzania (BoT), shows that during the first quarter the number of mortgage lenders also rose from 32 to 34.

However, the central bank states that regardless of the increasing demand in the market there is still a challenge of inadequate supply of affordable housing and the presence of high interest rates.

"Most lenders offer loans for home purchase and equity release while a few offer loans for self-construction, which for the most part continue to be expensive beyond the reach of the average Tanzanians," the statement reads in part.

Interest rates are still considered a constraint although there were improvements from the levels of 22 to 24 percent in 2010 to 15 to 19 percent offered today.

Another challenge noted by the country's financial regulator is the bureaucratic processes around issuance of titles which affects borrowers' eligibility to access mortgage loans.

BoT says, the rising demand is attributed by the positive economic growth in the country, population growth and the efforts of the government to partner with international organizations in providing affordable housing.

Moreover, five banking institutions still dominate the market as top lenders accounting for 68.39 percent of the total outstanding mortgage debt.

CRDB Bank Plc remains the market leader, commanding 39.97 percent of the mortgage market share, followed by Stanbic Bank 13.47 percent, Azania Bank 6.65 percent, NMB Bank Plc. 4.75 percent and CBA Bank 4.24 percent.

In the first quarter, CRDB Bank has offered Sh174.28 billion in mortgage loans, Stanbic Bank offered Sh58.74 billion, Azania Bank offered Sh29 billion, while NMB Bank and CBA Bank offered Sh20.72 billion and Sh15.48 billion respectively.