‘Fraudulent’ banks irk Housing Minister Lukuvi

16Apr 2016
Grace Kambaulaya
The Guardian
‘Fraudulent’ banks irk Housing Minister Lukuvi

MINISTER for Lands, Housing and Human Settlements Development William Lukuvi has called on banks to stop engaging in fraudulent practices by selling off houses of defaulting customers even when the outstanding amount of loan is less than the value of collateral.

William Lukuvi

He said that there are some banks which sell homes of their clients at a profit while keeping the balance for themselves instead of returning it to the owner.

The practice, he said, needed to be reviewed as it renders huge losses to clients, making the poor folks continue to reel in poverty.

Lukuvi made the remarks yesterday in Dar es Salaam at a meeting with real estate stakeholders where he also pointed out the need to establish laws that would guard the sale of properties if clients fail to service the bank loan.

He stressed that such laws would also help the country to launch the Tanzania mortgage refinancing company (TMRC) to manage capital from commercial banks involved with lending large amounts of money for real estate development.

According to him, long-term mortgage finance needs both the private sector and operators to enter into real state construction for houses which are then sold to the public for long term payments.

“The government has made great efforts in adapting regulations of the acquisition of plots and land for developing the housing sector,” he said, noting further that the ministry has also lessened the process of acquiring construction permits where contractors obtain a permit within 14 days.

He emphasized that it was time the government moved to protect the rights of housing sector stakeholders, recalling that the city master plan would be out by July this year.

The ministry shall work on increased rentals by tenants with a view to setting indicative prices for rentals.