IFC, Mortgage Refinance Company Partner to increase affordable housing

24Jan 2020
The Guardian
IFC, Mortgage Refinance Company Partner to increase affordable housing

INTERNATIONAL Finance Corporation (IFC)—a member of the World Bank Group has announced an investment of up to $5.75 million in the Tanzania Mortgage Refinance Company (TMRC) that will help grow the country’s nascent mortgage sector and increase access to affordable housing.

Jumoke Jagun-Dokunmu

According to a statement issued in Dar es Salaam yesterday, the financing includes the local currency equivalent of up to $1.5 million in equity and $4.25 million for a Medium-Term Notes (MTN) bond issuance, spread over multiple tranches. The investment leverages the International Development Association’s (IDA) Private Sector Window local currency facility and blended finance facility.

Jumoke Jagun-Dokunmu, IFC’s Regional Director for Eastern Africa, said: “IFC is committed to developing the property market in Africa by providing long-term, local-currency financing. By investing in the Tanzania Mortgage Refinancing Company, we hope to boost affordable mortgage lending to create more affordable housing for Tanzanian families.”

TMRC was established in 2010 under the World Bank’s Housing Finance Project and is regulated by the Bank of Tanzania (BOT). The World Bank, through the BOT, has to date provided a $70 million long-term funding to TMRC, which has supported the growth of mortgage loans from 579mortgagesin 2011 to 5,411 in 2019.  Furthermore, it helped improve affordability by extending the mortgage repayment period from five years to up to 25 years.

TMRC has issued two Medium-Term Notes totaling 21.7 billion Tanzanian shillings since 2018.The debt program is expected to reduce TMRC’s dependence on public sector funding. IFC will tailor its participation in the subsequent bond issuances as needed, to achieve the maximum impact.

“IFC’s investment will help TMRC attract new investors, meaning that we can obtain longer term, more diverse funding and sustainable pricing,” said Oscar Mgaya, Chief Executive Officer, TMRC.

IFC’s investment in TMRC will be accompanied by advisory support to grow awareness of the mortgage product in Tanzania, build primary mortgage lenders’ capacity in mortgage underwriting, marketing and portfolio management, to standardize mortgage terms, and asset or liability management.

IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. It has been working with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities where they are needed most. In fiscal year 2019, IFC delivered more than $19 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity.


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