Tanzania: NHC in advanced talks over housing financing

Negotiations are at advanced stage between the National Housing Corporation (NHC) and financial institutions on funding modalities for a massive residential housing project to reduce shortages in many parts of the country.

“We have started well and our discussions are in the final stages,” NHC director general, Nehemiah Mchechu, told The Guardian in an exclusive interview in Dar es Salaam yesterday.

The corporation’s top official said negotiations with seven financial institutions on how to finance the planned massive construction of residential houses, a project that would see 15,000 units and apartments erected countrywide as part of the housing agency’s resolve to supplement government efforts aimed at solving the problem.

“We have to agree before officially signing the contracts with these institutions,” said NHC DG, without mentioning the institutions currently negotiating with the housing agency.

Susan Omari, NHC Head of Pubic Relations and Corporate Social Responsibility, said yesterday that the project needed financial backup from banks, a factor that prompted the corporation to “take financial institutions on board in the implementation this project.”

She said that implementation of the project contained in the NHC five-year strategic plan, would have been impossible without strategic intervention of financial institutions.

According to the official, the project, which is currently at different stages of implementation, required sufficient funding. “We really need interventions of banks in two main aspects. In the first part, NHC need money to facilitate construction of the houses. Secondly, tenants/clients who would purchase NHC houses on loan basis need support of banks,” said Omari, underlining the importance of partnership between the banks and NHC.

“As NHC embarks on the project, support of financial institutions is vital; otherwise we may construct houses with nobody to purchase them. That’s why, we have started laying the groundwork for banks to support clients/buyers in purchasing the structures on loan basis,” she added.

According to Omari, the NHC would set up its own systems for screening applicants for mortgaged houses, but noted that banks, on the other hand, would have their own criterias for providing loans to the respective applicants.

“Securing housing loans would not be automatic. We will set our criteria for screening the applicants, but banks would have their own criterias for screening applicants before giving them loans to purchase the houses,” stressed official.

“The overall objective is to ensure that different social groups access the residential houses according to their incomes,” Omari said.