Tanzania Mortgage Refinance Company to Enter Housing Microfinance Market Through New Partnership with Habitat for Humanity International
DAR ES SALAAM (August 17, 2022) – Tanzania Mortgage Refinance Company (TMRC) signed a memorandum of understanding with Habitat for Humanity International today, a first step in the organizations’ joint-effort to expand strengthen the low-income housing finance sector in Tanzania.
Focusing on housing microfinance, the partnership aims to support lower-income Tanzanians and those working in the informal sector to more easily purchase, build or upgrade their homes, a segment of the population that has traditionally been underserved by the housing finance sector.
“The government is committed to such initiatives which are seeking to address housing challenges, especially for the low-income section of the population who have an even bigger challenge accessing formal mortgage loans due to their income levels,” said Hon. Ridhiwani Kikwete (MP), Deputy Minister of Lands, Housing and Human Settlement Development - URT.
Tanzania has one of the fastest growing economies in the world, however many families still struggle to access adequate and affordable housing. The high cost of formal financing options and limited affordable housing supply remain challenges. The Center for Affordable Finance in Africa estimates that Tanzania has a backlog of over 3 million homes, with demand growing by 200,000 homes annually.
“Habitat for Humanity and TMRC share a commitment to expanding access to quality housing for all families. This new collaboration is a key step to realizing that goal in Tanzania and will be instrumental in unlocking new housing finance opportunities for low-income families,” said Maurice Makoloo, vice president, Africa – Habitat for Humanity International.
“TMRC believes there is tremendous potential in Tanzania’s housing finance market to reach low-income families. As a wholesale lender we are eager to build a case for housing microfinance in the country and explore how the financial institutions we invest in can tap into this market through tailored loan products,” said Oscar Mgaya, Chief Executive Officer – TMRC.
Under the new partnership, Habitat for Humanity’s Terwilliger Center for Innovation in Shelter will provide Technical Assistance to TMRC to build a case for Housing Microfinacne in Tanzania and diversification of its offering to target the potential outside the traditional mortgage market
“The housing microfinance sector in Tanzania is still in its nascency. It is therefore critical that our efforts to expand the market are data-driven and informed by a strong understanding of low-income families’ housing needs across the country,” said Naeem Razwani, senior director for housing finance systems – Habitat for Humanity International.
Based on the findings fromthe market study to be conducted, TMRC plans to develop new mechanisms and structures to invest capital in banks and other financial instutions, for the purpose of on-lending to low-income families through new housing microfinance products. Habitat’s Terwilliger Center will provide technical assistance to TMRC in the develop of these mechanisms, as well as the financial institutions selected to pilot new housing loan products back-ed by TMRC’s investment.
Habitat for Humanity pioneered microfinance solutions to the housing constraints faced by low-income families. Habitat’s MicroBuild Fund was – the world’s first housing-specific microfinance investment vehicle – it has disbursed US$151.6 million to 59 institutions since 2012, helping more than 1 million people gain access to improved housing.
TMRC has played a leadership role in the national mortgage market to date, with its outstanding loan book growing to TZS 145.2 billion in June 2022, out of the country’s total market mortgage portfolio of TZS 510 billion, indicative that TMRC financed 28% of the market portfolio.
About Tanzania Mortgage Refinance Company Limited (TMRC)
Tanzania Mortgage Refinance Company Limited (TMRC) is a specialized private-sector financial institution that provides long-term funding to financial institutions for mortgage lending purposes. Since its inception, TMRC has helped to extend the mortgage tenors available in the market from 5-7 years in 2011 to up to 25 years today. It has the objective of supporting financial institutions to do mortgage lending by refinancing Primary Mortgage Lenders’ (PMLs’) mortgage portfolios. This type of lending is also known as wholesale or secondary market lending. TMRC is neither taking deposits nor lending directly to individuals. It refinances mortgage loan portfolios rather than individuals mortgage loans and caters to banks rather than individual borrowers. For more information, visit www.tmrc.co.tz
About Habitat for Humanity International
Driven by the vision that everyone needs a decent place to live, Habitat for Humanity began in 1976 as a grassroots effort and has since grown to become a leading global nonprofit housing organisation working in more than 70 countries, nine of them in Africa. Through financial support, volunteering or adding a voice to support affordable housing, everyone can help families achieve the strength, stability and self-reliance they need to build better lives for themselves. To learn more, donate or volunteer, visit habitat.org/Africa .
About Habitat’s Terwilliger Center for Innovation in Shelter
The Terwilliger Center for Innovation in Shelter, a unit of Habitat for Humanity International, works with housing market systems by supporting local firms and expanding innovative and client-responsive services, products and financing so that households can improve their shelter more effectively and efficiently. The ultimate goal of the Terwilliger Center’s market systems program is to make housing markets work more effectively for people in need of decent, affordable shelter, thereby improving the quality of life for low-income households. To learn more, visit habitat.org/tcis.