FIVE banks are controlling almost two-third of total country mortgage financing fund. The five banks had almost 200bn/- as outstanding mortgage debt out of 340bn/- by end of March.

The banks, according to Tanzania Mortgage Refinance Company (TMRC) report, left 26 others sharing remaining 140bn/- of outstanding loans for home building.

The leading bank is Stanbic that had 59.57bn/-, followed by Bank M with 49.41bn/-, the third was 39.83bn/- at the end of March. The fourth in line was Azania Bank and Commercial Bank of Africa with 28.32bn/- and 23.59bn/- respectively.

The remaining 26 banks have dished out between 18bn/- and 0.3bn/- per finance institution. TMRC data showed that merely 4,209 people in Tanzania have taken mortgage loans.

The ratio of outstanding mortgage debt to GDP stood at 0.43 per cent (0.46 per cent as at 31 December 2015), the Central Bank said in Tanzania Mortgage Market update of June 2017.

TMRC Chief Executive Officer (CEO) Mr Oscar Mgaya said the low penetration was mainly caused by low awareness as most people think building a house using own-pocket are saving.

“This is expensive undertaking since one pays rent at the same time building a house. “The best practice is to take a mortgage loan and buy a house and use the rent for repaying the loan,” Mr Mgaya said.

He said in most cases unaware of mortgage left would-be-home owner spend a large sum unknowingly.

The country penetration stands as the lowest in East African region. The second lowest rate states was Burundi with slight over 1.0 per cent followed by Kenya almost 3.0 per cent and Uganda close to 3.5 per cent. Rwanda tops the EAC list with almost 4.0 per cent. The East Africa mortgage debt was still low compared to South Africa and Namibia where the ratio is above 20 per cent, and developed countries such as the US market where the ratio is over 70 per cent.