Dar es Salaam. Tanzania’s mortgage market is set for a significant boost following KCB Bank Tanzania Limited’s investment of Sh500 million into the Tanzania Mortgage Refinance Company Limited (TMRC).
This strategic move, finalised in December 2024, positions KCB Bank as the 20th shareholder in TMRC, reinforcing its commitment to expanding affordable mortgage financing in the country.
TMRC, a specialised financial institution that provides long-term funding to banks and other lenders for mortgage financing, counts major financial players among its shareholders.
These include CRDB Bank Plc, NMB Bank Plc, National Bank of Commerce Ltd (NBC), TIB Development Ltd, Azania Bank Plc, Exim Bank (T) Ltd, and DCB Commercial Bank Plc.
The National Housing Corporation (NHC) and international development finance institutions such as Shelter Afrique and the International Finance Corporation (IFC) are also key stakeholders.
KCB Group Regional Businesses Director and KCB Bank Tanzania managing director, Cosmas Kimario, told reporters on Tuesday, February 18 that the investment would enhance KCB Bank’s ability to offer long-term mortgage financing.
“For years, KCB Bank Tanzania has been a trusted partner in the mortgage sector, providing innovative financial solutions that help Tanzanians achieve home ownership. This investment strengthens our capacity to provide sustainable housing finance solutions and expand access to mortgage loans,” Mr Kimario said.
He noted that becoming a shareholder in TMRC grants KCB Bank access to up to Sh10 billion in long-term financing, a twenty-fold increase on its initial investment.
“This means we will have more capital to channel into mortgage lending, addressing the housing deficit and making home ownership more accessible to Tanzanians,” he added.
As of September 2024, KCB Bank ranked eighth in Tanzania’s mortgage sector, having disbursed Sh34.1 billion in mortgage loans to 175 customers, capturing a 4.75 percent market share.
By December 2024, the value of mortgage loans extended by the bank grew to Sh34.6 billion, benefiting 99 of its 175 customers, facilitated by TMRC’s financing.
TMRC chief executive officer, Oscar Mgaya, said that KCB’s inclusion as a shareholder would further strengthen the mortgage sector.
“With 18 branches across major cities, including Dar es Salaam, Mwanza, Arusha, and Kilimanjaro, KCB Bank’s broad reach will improve mortgage accessibility across the country,” he said.
Mr Mgaya further noted that TMRC’s total shareholder capital stands at Sh33.4 billion, enabling the company to offer attractive loan terms.
“Interest rates, which previously ranged up to 20 percent, have now fallen to between 13 and 18 percent, benefiting borrowers nationwide,” he explained.
The CEO of Watumishi Housing Investment, Fred Msemwa, welcomed KCB Bank’s investment, underscoring its impact on increasing long-term mortgage lending resources.
However, he also called for further expansion of Tanzania’s housing finance sector to boost its contribution to GDP and overall economic development. Currently, the mortgage-to-GDP ratio remains below 1 percent.
With 31 banks offering mortgage loans in Tanzania, 16 of which are TMRC shareholders, the sector has so far provided Sh160 billion in funding, financing approximately 7,000 mortgage loans.
KCB Bank’s partnership with TMRC is expected to accelerate growth in the industry, offering more Tanzanians an opportunity to own homes through sustainable financing solutions.
