Despite growing rapidly, Tanzania mortgage debt outstanding as a proportion of Gross Domestic Product (GDP) has decreased to 0.44 per cent in September compared to 0.53 per cent in the quarter ended June this year.
According to Tanzania Mortgage Market Updates by the Bank of Tanzania (BoT), the statistics show that Tanzania has a relatively small mortgage market compared to the rest of the East African Member states.
“This is lower than its East African neighbouring countries but growing at an accelerated pace,” stated the report. Countries in the region with high mortgage debt are Kenya, Rwanda, and Uganda.
Average loan size as at 30 September 2016 was 136m/- which is equivalent to 62,060.92 US dollars. This is an increase from average loan size of 133m/- reported in the previous quarter.
The average loan size across mortgage lenders varied greatly, reflecting different strategies and customer bases. Akiba, EFC and DCB who target lower income customers had much lower average mortgage loan sizes than the likes of Stanbic Bank whose average loan size was 358m/-.
Equity Bank was a market leader commanding 24 per cent of the mortgage market share, followed by Stanbic Bank (14 per cent), Bank M (13 per cent), Azania Bank (11 per cent), and CRDB (6 per cent). Twenty eight different banking institutions were offering mortgage loans, with no new entrants in the market after the entrance of Diamond Trust Bank during the second quarter of 2016.
The number of mortgage lenders is expected to increase further as more lenders continue to launch their mortgage loan products. More positive developments are expected in the market with more banks now launching their mortgage loan products as competition in the traditional banking products continues to intensify.
Whereas large banks such as National Microfinance Bank (NMB), CRDB and National Bank of Commerce launched their mortgage products in previous years, Standard Chartered Bank and Diamond Trust Bank which ranked 4th and 7th respectively in terms of banking sector market share in 2015 have entered the market during the first half of 2016.
