The Bank of Africa Tanzania has gone a step further to strengthen its home finance services after investing 1bn/- and taking a 9.57 per cent stake in the Tanzania Mortgage Refinance Company Limited (TMRC).
With the new investment, the bank has joined other 10 member banks of the TMRC issuing residential mortgage loans.
“Today marks another major milestone in the growth of Bank of Africa in financial services industry in Tanzania,” the bank’s managing director, Ammish Owusu-Amoah, told journalists yesterday in Dar es Salaam.
He said that mortgages were an essential aspect of financial development and a major product for every developing economy, adding that the bank is convinced that it’s important for individuals to explore the opportunity of owning house through mortgage.
”A mortgage is not a burden as many of us are made to believe, but rather they relieve the burden,” he said. The MD said Tanzanians must move away from ‘fearing’ mortgages to taking their advantage.
TMRC chief executive officer Rished Bade said member banks have so far contributed a total paid up capital of 10.45bn/-, adding that in additional to that the TMRC also has additional funds from the government through the central bank amounting to 50bn/-.
“We have issued loans worth 4.2bn/- to member banks to refinance mortgage portfolios,” Bade said, adding that the company has also organised various overseas training tours for member banks to learn from other countries advanced in the sector.
Bank of Africa Tanzania launched its Home Finance product in November 2011.
The product called Bank of Africa Home Finance is primarily a long term facility designed to enable individuals acquire structured loans that will help them own, improve, complete or release equity investments on their new or existing homes.
Three forms of home finance are on offer and these include home purchase loan, home equity loan and home improvement loan. The home purchase loan is designed to assist one purchase of residential properties.
The TMRC is a mortgage liquidity facility established by commercial banks with support from the government and the World Bank with the aim of supporting member banks to extend long-term mortgage loans to the public.
To date TMRC has eleven member banks namely Exim, National Micro Finance Bank (NMB), CRDB, National Bank of Commerce (NBC), Azania Bank, Tanzania Investment Bank (TIB), Dar es Salaam Commercial Ban (DCB), NIC Bank, Peoples Bank of Zanzibar (PBZ) and the new comer, Bank of Africa Tanzania.