In Summary

Tight liquidity in the banking system and rising non-performing loans are troubling the growth of mortgage market in the country.

Dar es Salaam. The mortgage market shrank by 2.8 per cent during the second quarter of 2018, compared with the previous quarter.

The situation has been attributed by tight liquidity in the banking system and rising non-performing loans, according to Tanzania Mortgage Market updates.

“Outstanding mortgage debt as at June 30, 2018 fell to Sh331.49 billion [equivalent to $145 million] compared with Sh340.92 billion as at March 31, 2018,” the report by the Bank of Tanzania (BoT) noted.

However, an average mortgage debt size increased to Sh81.62 million, which is equivalent to around $35,704, compared with Sh81 million on March 31, 2018.

The report also reveals that the ratio of outstanding mortgage debt to gross domestic product stood at 0.32 per cent, from 0.33 per cent on March 31, 2018.

However, the number of mortgage lenders remained with 31 financiers as it was in the first quarter, according to the report.

During the period, the mortgage debt advanced by top five lenders accounted for 59 per cent of the total outstanding mortgage debt.

Stanbic Bank was leading with 17.83 per cent of the total mortgage market share, lending Sh59.12 billion to 178 mortgagors.

It was followed by Bank M which held 14.14 per cent, disbursing Sh46.86 billion to 29 mortgagors.

The report showed CRDB Bank was the third, with 12.24 per cent, with a total of Sh40.56 billion which were lent to 315 accounts.

Other lenders, with their percentages in brackets, were Azania Bank (8.77) and Commercial Bank of Africa (6.33), which got the fourth and fifth slots, providing Sh29.08 billion and Sh20.98 billion.