PROPERTY developers and financial institutions were on Wednesday invited to apply for loans of up to 5 million Euros (over 10bn/-) for construction of cheaper houses for sale to people struggling to own decent homes.
Board Chairman of the Netherlands-based Oikocredit International Fidon Mwombeki said in Dar es Salaam that the global financing institution will start lending to property developers who will in turn give credits to local families.
"Let's help people get their own decent houses through provision of affordable loans," Dr Mwombeki told reporters before the institution started its annual general meeting which was officiated by Deputy Foreign Affairs Minister, Mahadhi Mahadhi on behalf of Foreign Affairs and International Cooperation Minister Bernard Membe.
Dr Mwombeki, a reverend and Secretary General of United Evangelical Mission based in Germany, said Oikocredit was established by World Council of Churches in 1978 and has made a difference among poor people by providing them with affordable loans.
"Oikocredit has proved that poor people do repay loans, the notion that poor rural people don't pay loans is wrong," said Dr Mwombeki whose organization has lent over 26bn/- to individuals, microfinance institutions, savings and credit cooperative society and banks.
Over 80 per cent of the loans have been invested in rural areas targeting agriculture, micro-credit schemes, livestock husbandry and small scale businesses such as tailoring.
Oikocredit Country Director Deus Manyenye said much of their loans are concessional and go to people who cannot access bank loans because of lack of security.
"But our loans are also flexible, we give people a grace period," Mr Manyenye pointed out.
He said loans are provided both in local and foreign currency with a repayment period of between six and ten years.
"Our interest rates are very low compared to what the market charges," Manyenye noted.
Deputy Minister Mahadhi commended Oikocredit for supporting the government's initiative to fight poverty by providing low interest rate credit to the un-bankable majority rural people whose main occupation is agriculture.
"Initiatives such as those of Oikocredit are very important to a country like Tanzania where only about 10 per cent of the over 40 million people have access to bank services," Mr Mahadhi pointed out.
Oikocredit in Tanzania started in 2006 and accounts for 22 per cent of Oikocredit in East Africa which started in 1995 in Kenya.
Uganda accounts for 28 per cent of the portfolio while Rwanda has just joined with EUR 200,000 allocation made last year.
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