World Bank has last month approved US$60m to fund affordable housing in Tanzania. The move will be crucial as the country is experiencing rapid urbanization in the recent past according to Philippe Dongier, World Bank Country Director for Tanzania, Burundi and Uganda.
The financing will go towards mortgage market to help ordinary families with house building initiatives. The director said that the loan will go a long way in expanding the construction industry in the country, as well as supporting urban residents facing problems with housing credit.
The loan will be part of the World Bank’s International Development Association (IDA) initiative where grants, low-interest or zero interest loans are accessible to fund projects. The loan will build on the achievements of currently underway 2010 Housing Finance Project (HFP) which has seen formation of the Tanzania Mortgage Refinancing Company (TMRC).
“The biggest investment opportunity in housing in Tanzania is in housing supply side especially in affordable housing. There is a huge demand for housing and very few private housing developers in Tanzania.” Oscar Magaya has been quoted saying previously.
Tanzania is facing a 3,000,000 units housing deficit and 50-70% of urban dwellers live in informal housing according to last year’s report by World Bank. World Bank also found that it is slow to build houses in the country, with 98% of existing housing is built incrementally by individuals. It has said the funds will improve the situation. The report also said there was need for appropriate low cost building materials and technologies to help affordable housing sector.
Among other initiatives, the government announced last year it would fund construction of 50,000 house units through Watumishi Housing Company (WHC) for civil servants to access through low mortgages. The units would be built in Dar es Salaam, Coast Region, Tanga, Arusha, Mwanza, Shinyanga, Mtwara, Lindi, Tabora, Dodoma, Morogoro, Kilimanjaro, Ruvuma and Mbeya.