The government has called on financial institution to reduce interest rates when disbursing home loans so as to enable majority of home builders to join the estate sector.
Speaking at the closure of the Tanzania Homes Expo held at Mlimani City at the weekend, Vice President Mohammed Ghalib Bilal said owning a home is one of the very important things to everyone.
“People need beautiful homes; so I call upon financial instructions and all those engaged in the housing industry to reduce interest rate so as to pave way for the majority Tanzanians to own decent homes,” he said.
The Vice President urged the National Housing Corporation (NHC) and the Building Research Agency (BRA) to work hard and come up with solutions that would ease low income earners to own decent and affordable homes.
He added: “The low income earners have got passion to build own houses but honestly, financially they are weak, nonetheless, with your initiative and research, hopefully things would be changed.”
A random survey conducted by this paper during the expo, revealed that it has been and would be hard for majority low income earners to have decent homes given the prevailing economic situation.
The paper visited various financial institutions’ pavilions and discovered that for one to have a mortgage loan, they need to have a bank account which should be active for not less than three months.
Abdul Mrisho, a Dar es Salaam resident told this paper: “Though it is everyone’s dream to own a good home, it is so hard for the low income earners to do so because the prevailing banking system is not supportive.”
Mrisho explained that such a tailback has been a result of by low income earners’ failure to have collateral from which the financial institutions could issue home loans to them.
For his part, Home Expo Director Zenno Ngowi admitting the fact said: “It is true that the country is facing this challenge which isolates those with no collateral to fullfill their dreams on homes. However we do have some of non governmental organisations come to the help of such people.”
He appealed to the government to empower those NGOs so as to reach up to many people, especially those who are deep in the villages.
According to Ngowi, issuance of national identity card would also help the low income people to be easily indentified and hence benefit from mortgage loans.
Housing finance in the country was managed by the Tanzania Housing Bank which collapsed in 1993.
The demise of the Tanzania Housing Bank was prompted by the liberalisation of the banking sector. The bank had issued many housing loans which it could not recover.
Ever since the government has been struggling to establish a new finance facility to provide loans to house buyers and developers.