Tan­za­nian home lenders boosted with $52m bond

The East African - - BUSINESS - By BEATRICE MATERU Spe­cial Cor­re­spon­dent

THE TAN­ZA­NIA Mort­gage Re­fi­nance Com­pany (TMRC) is is­su­ing a five-year medium term note worth Tsh120 bil­lion ($52.6 mil­lion) with the first tranche of Tsh12 bil­lion ($5.26 mil­lion) ex­pected this month.

TMRC pro­vides long-term fund­ing to fi­nan­cial in­sti­tu­tions for mort­gage lend­ing.

Am­mish Owusu-amoah, chair­man of the TMRC board, said at the launch that the tim­ing is right con­sid­er­ing the de­cline in in­ter­est rates. He said the com­pany was ear­lier un­able to is­sue the note be­cause it would have proved too ex­pen­sive for its cus­tomers, the pri­mary mort­gage lenders.

High de­mand

“In De­cem­ber 2014, the weighted av­er­age yield for 182-day Trea­sury bills was 15.5 per cent whereas that for the 5-year Trea­sury bonds was 16 per cent. But by May 2018, it had de­clined to 12.67 per cent for the 182day Trea­sury bill and 11.06 per cent for the 5-year pa­per.

TMRC chief ex­ec­u­tive Os­car Mgaya said the cap­i­tal mar­ket was one their sources of rais­ing funds as the firm does not take de­posits or lend di­rectly to in­di­vid­u­als.

De­mand for hous­ing and hous­ing loans in the coun­try is high.

Data from the Bank of Tan­za­nia shows that the hous­ing deficit is three mil­lion units, with a 200,000unit an­nual de­mand.

“Com­pared with its neigh­bours, Tan­za­nia has a rel­a­tively smaller mort­gage mar­ket, al­though it is grow­ing rapidly. At the end of the first quar­ter of 2017, mort­gage debt out­stand­ing as a pro­por­tion of GDP was around 0.46 per cent, but grow­ing rapidly,” the BOT said.

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