In line with company’s dividend policy, the Tanzania Mortgage Refinance Company Limited (TMRC) board has proposed dividends amounting to 939.7m/- for the financial year ended in December 2023, which is equivalent to 40.15/- per share.

According to the audited financial statement for 2023, this is an increase of 88.8m/- compared to 850.96m/- or 36.90/- per share paid during the year ended in December 2022.

The report shows that the Company recorded a net profit of 2.3bn/- last year compared to 2.1bn/- earned in 2022.

The result was mainly attributed to creation and maintenance of good investment portfolio as well as effective cost management, the report reads. 

Return on equity increased to 6.2 percent last year, compared to 5.8 percent in 2022, while basic earnings per share improved by 10 percent to 101.5m/- compared to 92.4/- recorded during the previous financial year.

During the year, total income increased from 8.25bn/- in the prior year to 9.76bn/-, an increase of 18.05 percent, while revenue amounted to 23.22bn/- last year, compared to 21.50bn/- respectively.

Revenue mainly comprises of the interest on the outstanding loans advanced to the borrowers and interest from government securities.

Loan portfolio increased by nine percent to 160.1bn/- during last year, compared to 146bn/- recorded during the previous year.

However, company saw its total assets falling by 2.7 percent to 217.7bn/- last year, compared to 221.7bn/- recorded during the previous year as well as shareholders’ equity, which declined to 34.97bn/- from 40.33bn/- respectively.

TMRC currently has 15 borrowing members (all of which are now offering mortgage loans) and has already extended loans worth 158.70bn/- to fourteen (14) of its member banks and four (4) nonmember banks. 

As at 31st December, 2023, refinancing and pre-financing mortgages advanced by TMRC to its member and non-member banking institutions was equivalent to 26.72 percent of the total outstanding mortgage debt.

The report notes that TMRC ‘s contribution to the growth of the housing market is expected to significantly increase over the coming years as the new financing will build on the achievements of the ongoing Housing Finance Project (HFP) which is playing a key role in developing the mortgage market. 

In addition, bond issuance long term line of credit will continue to be the source of further TMRC lending to Primary Mortgage Lenders (PMLs) which continue to offer mortgages to their clients. 

So far, TMRC has issued bond in four tranches since 2018 to 2023 which were all oversubscribed.

In the thirteen years that TMRC has been operational, a significant impact has been noted in the mortgage market, the report says. 

The number of banks offering mortgage loans has grown from only 3 banks in 2010 to 31 banks on 31st December 2023 and mortgage repayment period has increased from the maximum of 7 years that was previously offered in 2011 to between 15 and 25 years that banks offer now. 

In effort to grow mortgage market in Tanzania TMRC has also focused its growth strategy on ensuring the company obtain alternative concessionary funding either by working with the government and/or from DFI’s using government guarantee. 

The company is expecting to improve its IT system and staffs’ skills through training program. 

As at the end of 2023, the report says, TMRC had a pipeline of 45bn/- billion which was awaiting disbursement and discussions with financiers for concessionary funding to refinance the pipeline was still on-going.

To boost its cash flow, TMRC Management has set out various strategies that will ensure the long-term sustainable funding which can be used to on lend to the PMLs. 

One of the strategies is engaging different Development Finance Institutions (DFI) who will be able to lend to TMRC at a low cost given that TMRC has low risk profile. 

The company reports that it is currently in discussion with several DFIs and some of these discussions are in a very advanced stage.

Also sourcing funds locally is part of TMRC strategy of raising long term funding through corporate bond issuance. 

However, the company notes that, raising funds through capital markets is more expensive, so management is looking for options of blending these funds with concessionary funds to make them affordable for the PMLs.