EDITORIAL:Reduce interest rates on mortgage finance

Friday June 8 2018

Last week we raised concerns over the lack of awareness about mortgage financing among Tanzanians; and that owning a house remains a pipe dream for many low and middle income earners mainly due to high interest rates for those considering borrowing from banks to put up their own structures. Our concerns have once again been vindicated by reports that there are no takers yet for $24 million (Sh54 billion) provided to the Tanzania Mortgage Refinance Company (TMRC) by the World Bank with a view to growing the housing finance portfolios of local banks.

TMRC has since requested for an extension to June next year, as it seeks to ensure that the funds are fully utilised. As it stands, banks have not been interested in the funds because they do not have clients willing to buy houses through the mortgage financing scheme. If there are no takers, the money will have to be returned to the World Bank because it cannot be used for anything else.

It is against this background that we want to reemphasise the need for the lenders to make the available mortgage financing system friendly to the intended beneficiaries.

In 2010, the government and the World Bank co-founded the TMRC to support selected member local banks to extend long-term mortgage loans to the public. This was a good initiative, and there have been many other schemes aimed at reducing the country’s housing backlog, currently estimated at 3 million units. The fact is that housing demand is growing in tandem with population increase, construction costs and rentals. But at the same time, housing development has been hampered by exorbitant costs of mortgage finance.

This has to be addressed. Improving the mortgage climate by cutting down interest rates may not be the sole panacea, yet it still is a good starting point.


Yet another fatal road accident has occurred, killing at least 10 persons, and injuring 26 others. The crash involved a passenger bus and a goods train at the Gungu railway crossing in Kigoma District on Wednesday.

Preliminary findings are that the bus driver is to blame for the tragedy, apparently having tried to beat the train to the level crossing for reason(s) that turned out to be as foolish as they were tragic.

This coming at a time when Tanzanians were still sighing in relief following reports that the incidence of road vehicle accidents fell by 43.9 per cent last year is most consternating to say the least.

Traffic Police data showed that the number of road accidents actually dropped from 9,151 during January-November 2016 to 5,135 in the same period last year, with deaths therefrom also dropping from 2,994 to 2,379, respectively.

The authorities should redouble efforts to stay on top of the game, always striving to surmount the distressing hydra-headed roads monster by attrition.

In his condolence message, President John Magufuli has appealed to stakeholders to take necessary measures to control traffic accidents. It’s a rallying call that the authorities should take seriously to prevent accidents caused by human error.