AfDB pumps $4m into mortgage refinance company

14May 2016
Correspondent
The Guardian
AfDB pumps $4m into mortgage refinance company

THE African Development Bank Group (AfDB) board has approved a partial credit guarantee (PCG) of up to $4 million in local currency to Tanzania Mortgage Refinance Company (TMRC).

AfDB Resident Representative, Dr Tonia Kandiero

Speaking in Dar es Salaam on Thursday, AfDB Resident Representative in Tanzania Dr Tonia Kandiero said PCG will support TMRC’s proposed medium-term programme to raise long-term funding from Tanzania’s local currency bond markets on the Dar es Salaam Stock Exchange (DSE) for on-lending to local banks for mortgage finance operations.

The bank’s PCG will enable TMRC’s bond to meet minimum requirements for listing on the DSE, thereby enhancing the firm’s capacity to mobilize critical long-term funding required for the growth of Tanzania's housing finance markets, thereby catalyzing the construction of affordable housing.

She said the bank’s intervention was in line with the High 5s agenda for the bank group, building on its existing 2013-2022 strategy, and specifically on the 5th agenda of improving the quality of life for the people of Africa.

The five focus areas are essential in transforming the lives of the African people and therefore consistent with the United Nations agenda on Sustainable Development Goals (SDGs).

The bank’s intervention will also result in a multiplier effect on industries related to the real estate sector and creation of jobs in the construction industry.

It will also assist in deepening of Tanzania’s capital markets by increasing the number of listed corporate bonds in the local bond market as well as match assets and liabilities of the institution.

The PCG will complement Tanzania government efforts to develop a self-sustaining long-term mortgage market in the country.

The bank group’s Division Chief, Financial Markets Division Stella Kilonzo stated, “By extending this partial credit guarantee, the AfDB adds on its existing initiatives to support the development of local currency financial markets on the continent and the private sector.”

As one of its priority objectives, the AfDB supports investments that contribute to the widening and deepening of financial markets in Africa, and enabling the private sector capacity to mobilize long-term funding from local financial markets.