Mortgage finance business is set to achieve astonishing feat in Tanzania as banks and specialised mortgage financing dealers make daring market debuts.
The latest market entry was marked last week by Tanzania Mortgage company (T-Mortgage) services, a subsidiary of T- Mortgage North America Business Development.
In May this year, Stanbic Bank launched a home loans product as well.
These developments are a direct response to the April enactment of Financial Leasing Act (2007), an important outcome of the government�s spearheaded second generation of financial sector reforms initiative.
During the launch of Tanzania Mortgage Company, Pamela Karabani, a Tanzanian living in United States and development manager of the parent company said their services would help reduce problem of decent housing deficit Tanzania.
Up to moment, she said, the housing deficit is estimated to be between 2 to 3 million units and is it increasing by the years.
Tanzania has a population of over 35 million but there are about 7 million homes only.
To address the growing housing deficit, she urged the government to collaborate with stakeholders to ensure that the mortgage industry grows at a reasonable pace, by removing all impediments which hinder the ordinary man to own a house.
In line with such concerns, incidentally raised earlier by other interested stakeholders, a draft Unit of Titles Bill, as well as a draft miscellaneous Bill to amend four laws, namely, the Land Act 1999; the Land Registration Act; the Civil Procedures Act; and the Magistrate Court Act have already been prepared.
A Mortgage Finance Bill would also be enacted this year.
Typical reform projects in second generation of financial sector reforms would involve the implementation of home mortgage finance and a secondary mortgage market.
Speaking at the same event, the T- Mortgage Chief executive officer, Prof Charles Inyangete, said over the past several years it has become apparent that home ownership in Tanzania is under-served.
He said due to various problems home ownership in Tanzania is often a difficult and lengthy process.
For that reason, he said his company would work directly with residential property developers to ``ensure their customers have ability to easily get quality properties, allowing them to move in quickly, while paying for the home gradually over a period of 15 years``.
Up to the moment the company has secured more than 1,000 houses in Arusha, Mwanza and Dar es Salaam regions which would be loaned to small and medium income earners.
For his part, the Panafra (T) President Salim Zagar, said they have been impressed by the efforts the company was making to support property developers with products, processes and services which encourage and enable an increased housing inventory to be made available to a wider segment of Tanzanians.
A good number of houses built in Tanzania lack title deeds which also in turn hinder their valuation and free transfer.
This prompted launching of Property and Business Formalisation Programme (PBFP) during third phase government of President Benjamin Mkapa.
It aims at freeing and strengthening the informal sector and integrates it into the mainstream economy.
About 75 percent of the properties of about 9.2m urban dwellers in Tanzania have been neither surveyed nor formalised.
* SOURCE: Guardian
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