What bank’s housing loan means in access to better housing

NBC Bank has launched a home loan campaign dubbed ‘Mkopo wa Nyumba wa NBC’ in order to improve the public’s access to better housing in Tanzania. The campaign offers Tanzanians the opportunity to access loans ranging from 20m/- to 1bn/- with the flexibility to settle back gradually for period of up to 25 years.

The primary goal of the lender’s initiative is to accelerate the availability of improved housing options throughout the country.

The campaign was launched in Dar es Salaam on Wednesday and attended by various stakeholders such as the Tanzania Mortgage Refinance Company Limited (TMRC),  CPS, a Real Estate developer in Tanzania, Nabaki Afrika Limited,  retailers and wholesalers of building products and construction materials, government officials, customers and employees of the bank among others.

Representing the bank’s Managing Director, Theobald Sabi, NBC Director of Retail, Elibariki Masuke said that the campaign was aimed at empowering many Tanzanians to own houses and reduce lack of settlement in the ever growing cities.

He added: “The campaign seeks to stimulate economic growth and development within the society by providing the people with secure housing options. Furthermore, it aims at bolstering the commercial real estate sector within the country.

“Building homes creates employment opportunities for a wide range of individuals, from construction workers to building materials vendors. This, in turn, stimulates economic circulation through the purchase of materials and generates revenue for the government through taxes on water and electricity usage within these homes. As a result, this campaign presents vast economic opportunities across the entire construction industry value chain.”

Equally, Mr Masuke outlined that the loan option is associated with the plan that includes renovation or completion finance so that a customer completes building his/her house.

“Through our home purchase loan, we have collaborated with various companies, including CPS, a real estate developer in Tanzania to provide customers with the opportunity to buy homes at a reduced interest rate. The loan range varies from 20m/- to 1bn/-, with repayment lasting up to 25 years, allowing the bank to offer up to 85 per cent of the home’s value.

“With regards to the renovation or completion loan, NBC gives customers the chance to complete the construction of homes that they had started but were unable to finish due to various reasons. In this category, we have established partnerships with stakeholders, including dealers of construction materials like Nabaki Africa, where NBC customers will receive discounts on purchases made through them,” he pointed out.

Mr Masuke noted that the home guarantee loan enables customers to use their property as collateral when obtaining a loan. The funds can be utilised for various development projects, such as investing in businesses or government bonds. Additionally, the loans include property and life insurances to ensure the safety and security of the loan recipient and their families at all times.

Speaking at the event, Tanzania Mortgage Refinance Company Limited Chief Finance Officer, Oswald Urassa, said that the current rate of affordable housing loans in the country is still below 1 per cent, compared to neighbouring countries like Kenya with 1.8 per cent and Rwanda with 4 per cent. He commended NBC Bank for introducing a service that will boost the availability of decent housing in Tanzania.

“TMRC is well-prepared to work closely with NBC to achieve this important plan, which is in line with the government’s goal of improving housing for its citizens. This loan can attract more people, especially considering the 25-year repayment period, during which borrowers can repay the loan amount equal to or less than the amount they pay for their house rents. I urge Tanzanians to seize this opportunity,” Urassa said.

CPS, Chief Executive Officer, Sebastian Dietzold, cited economic challenges among Tanzanians as one of the major obstacles to achieving adequate housing. He identified the NBC Housing Loan as a crucial solution to this problem.

Meanwhile, CEO of Nabaki Africa, Russel Stuart, revealed that through the NBC Housing Loan programme, the company plans to offer discounts ranging from 5 to 15 per cent on certain building materials for customers who benefit from the loan.

The NBC Housing Loan campaign comes at a time when statistics show a demand for 200,000 new homes each year in the country, while there is a current shortfall of three million housing units.