Mortgage Pact Seeks to Ease Housing Problems In Tanzania

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The state-owned real estate firm, Wananchi Housing Company (WHC) has signed an agreement with CRDB Bank to finance mortgage to enable low and middle income people purchase houses.

The WHC Chief Executive Officer (CEO), Dr Fred Msemwa, said in Dar es Salaam yesterday that the new scheme was aimed at accommodating the huge demand for residential houses in urban areas.

“The demand stands at 1.9 million residential houses in urban areas per year while Dar es Salaam alone demands 400,000 residential houses per year,” said the CEO, during ceremony to sign the agreement with CRDB Bank.

Dr Msemwa said that the government employs about 30,000 people per year but the civil servants are forced to rent houses for years due to lack of funds to buy houses, saying 98 per cent of people construct residential houses using their own earnings.

“The scheme will facilitate construction of modern residential houses for civil servants but with affordable prices,” he said.
CRDB Bank CEO, Dr Charles Kimei, said contrary to mortgage offered by other banks, the new scheme will take 25 years to pay off the loan, saying most banks require people to return the loan within 15 years. “The civil servants can process the application for the loan within one day.

The interest rate stands at 16 per cent,” observed the CRDB Bank CEO. Dr Kimei, pointed out that under the agreement, CRDB can offer up to 500m/- for single project to put up residential houses and that the scheme will facilitate the National Vision 2025 to transit the country from least developing to a middle income country. “The new scheme will strengthen competition of the real estate business.

The people will have more choices on the market,” he said. Dr Kimei said low income was a major challenge for the real estate business but with introduction of mortgage, the price will be affordable, adding that the scheme will facilitate planned settlements. “The urban areas will have planned settlements with important infrastructure including water, roads thanks to professional developers,” he said.

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