Mortgage financing in Tanzania (Limits to homes)

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university of Dar es Salaam
The need for finance to build houses has been rising with increased urbanization as well as the population growth. Bearing in mind that modern housing is one of heavy capital users, financial institutions are expected to play a key role in the provision of finance necessary to bridge the gap between construction costs and own savings. Mortgage financing in Tanzania is still very limited with only one financial institution providing yhe same in the country. Considering that income levels for most Tanzanians are low, savings at individual household levels are also quite low. It is with the above scenario in view that this research was conducted, to explore the causes for non- provision of mortgage finance by financial institutions as well as the reliance on own financing mechanism for housing development purchase, against the backdrop of high costs involved with the processes and low savings at individual levels. In addition to undertaking extensive review of literature on mortgage financing and housing finance in general, he findings of the study, which are results of questionnaires administered to individual housing developers in Dar es Salaam and interviews with NBC, NSSF and Azania Bancorp officials show that the problem of slow development of mortgage financing in the country is a two- way traffic. The financial institutions on one hand contribute less to the sector and on the other hand individuals rely on own financing mechanisms to finance housing. Fromm the exploratory review and empirical analyses it can therefore be concluded that, legal, economic and financial policies spread head the slow development of mortgage financing in the country. This situation does not auger well for the fast development of the housing sector and social wellbeing of the majority of Tanzanians.
Available in print form, East Africana Collection, Dr. Wilbert Chagula Library, Class mark (THS EAF HD7287.55.T34K3)
Hopusing finance, Mortgages, Tanzania
Kabyemera, L. D. (2002) Mortgage financing in Tanzania (Limits to homes), Master dissertation,University of Dar es Salaam, Dar es Salaam.