It was a mark of achievement marked by a Mortgage Finance business in East African state Tanzania when a green light to carry out operations after a long time of waiting for a positive answer from the government was given.
First Housing Company (Tanzania) Limited have been licensed by the Bank of Tanzania (BoT) to conduct mortgage finance.
“The license allows the company to carry out Mortgage Finance business in Tanzania as a housing finance company. This is the first housing finance company to be licensed by the central bank,” a statement issued by BoT’s Department of Policy Review and Licensing Department in the Directorate of Banking Supervision said.
The move has come at a time the country is lagging behind their peers in the bloc. And in this year’s quarter one, the sector registered an abruptly slowed down growth to 11.3 per cent compared to 34 per cent in same quarter last year.
The fall was attributed to changes of market conditions envisaged to improve in the near future. Nevertheless, BoT envisage the firm would improve mortgage finance business in near future.
According to BoT latest mortgage market updates, total lending by banking sector for the purposes of residential housing in quarter one was Tshs416.85billion.
This represents a very slight decline of 0.02 per cent from total mortgage lending of Tshs 416.94billion of the preceding quarter. Further, the increased competition as new lenders enter the market has also contributed positively to the observed growth.
Up to the end of March this year 29 different banking institutions were offering mortgage loans, with a new entrant in the market during this quarter being Letshego Bank. The number of mortgage lenders was expected to increase further as more lenders continue to launch their mortgage loan products.
However, during the quarter, the mortgage market was dominated by five top lenders commanding about 70 per cent of the mortgage market.