CAHF and the African Union for Housing Finance (AUHF) recently visited Dar es Salaam, Tanzania to host a workshop on Mortgage Market Development in Tanzania and to further engage with local stakeholders. We were in Tanzania for 3 days from the 6th to the 8th of February 2017. The workshop was held on the first day and we were hosted at the conference rooms of the Bank of Tanzania (BOT). Illana Melzer from Eighty 20 presented a case study on Access, Profitability and Performance, an Overview of the Mortgage Market in South Africa. The aim was to share the South African experience of extending mortgage finance down market with the Tanzanian stakeholders to explore ways in which this might assist Tanzania. Mainly private bankers attended with a room of about 40. Much enthusiasm was expressed at the need for the growth of the mortgage market and through this initiative we were able to engage with many private sector players in the banking industry as well as some of the AUHF members. See the latest AUHF newsletter here.
In September 2016 there were only 2 981 mortgages in Tanzania with an outstanding mortgage debt of about US$191 million (in December 2016) and a growth rate of 16% over the year 2016 (lower than the previous year by 29%). There are 28 lenders currently, up by two since 2015. Key challenges to growing this market are the high interest rates charged to end users at between 16 and 19% and the lack of supply of affordable housing. In addition, locals are debt averse and there is a need to provide consumer education on the mortgage product and its benefits of mortgage loans. The annual demand for housing is 200 000 units. More detail on the mortgage market in Tanzania can be found on the quarterly report prepared by the Bank of Tanzania and Tanzania Mortgage Refinance Company entitled Mortgage Market Update.
The remaining days were spent in meetings with organisations involved in the planning and delivery of housing and housing finance such as WAT-Human Settlements Trust, Habitat for Humanity Tanzania, Watumishi Housing Company, Ministry of Lands, Housing and Human Settlements, Tanzania National Bureau of Statistics etc.
The attached presentation provides an overview of the engagement we had in Dar es Salaam. Below is a picture of one of Watumishi’s developments located close to the recently developed Bus Rapid Transit system.