TMRC targets housing crisis with new bond

DAR ES SALAAM: TANZANIA Mortgage Refinance Company (TMRC) has launched a new housing bond aimed at expanding access to long-term mortgage financing and addressing the country’s growing housing deficit.

Speaking during the launch in Dar es Salaam yesterday, TMRC Chief Executive Officer, Elibariki Ndossi said the bond is designed to strengthen banks’ ability to provide affordable housing loans to Tanzanians. TMRC operates as a refinancing institution, supplying long-term funds to commercial banks and financial institutions to support mortgage lending.

The bond forms part of TMRC’s second Medium Term Note Programme, valued at up to 100bn/-. The first phase seeks to raise 20bn/-, with an additional 10bn/- green shoe option available if demand increases.

“The bond carries an annual interest rate of 11 per cent with no withholding tax, and interest payments will be made twice a year,” he pointed out.

Dubbed the “Nyumba Bond” and translated as “Housing Bond”, the issuance marks another attempt to deepen Tanzania’s capital markets while mobilising long-term financing for the housing sector.

Mr Ndossi said the programme is intended to increase the availability of affordable mortgages and improve access to decent housing, particularly as demand for homes continues to outpace supply nationwide. Tanzania faces a housing shortage of over 300,000 units annually, with supply lagging due to limited construction capacity, high borrowing costs and weak long-term mortgage financing.

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The Tanzania Mortgage Refinance Company said proceeds from its bond will support banks in expanding mortgage lending, housing development, and home improvement financing.

The firm, which reports no non-performing loans, is offering an 11 per cent tax-exempt annual interest rate with semi-annual payments. Mr Ndossi acknowledged continued support from the Bank of Tanzania and the government, which owns a 27 per cent stake in TMRC. Other shareholders include local banking institutions, Shelter Afrique, and the International Finance Corporation.

Capital Markets and Securities Authority (CMSA) Chief Executive Officer CPA Nicodemus Mkama said the regulator approved the bond as part of broader efforts to support the country’s National Development Vision through housing and infrastructure financing. He further noted that the funds raised are expected to stimulate housing construction, create employment opportunities, and improve access to affordable homes.

He added that the programme reflects increasing use of capital markets to mobilise long-term domestic financing for strategic sectors of the economy.