IFC invests in Bond to promote access to affordable housing in Tanzania

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Dar es Salaam, Tanzania July 15,2021 – To help increase access to long-term, affordable mortgages and housing in Tanzania, IFC subscribed to a corporate bond issued by the Tanzania Mortgage Refinance Company (TMRC), which is listed today at the Dar es Salaam Stock Exchange. The TMRC bond will promote access to mortgages, making it easier for Tanzanians to buy homes in a country where access to long-term finance has traditionally been limited.

The listing follows approval from the Capital Markets and Securities Authority and a successful bid that raised more than TZS 8.9 billion ($ 3.8 million) against a target of TZS 7 billion ($ 3 million), an oversubscription of 27%. IFC has invested approximately $ 1.2 million (TZS 2.8 billion) in the oversubscribed bond offering.

“IFC’s participation in the third tranche of TMRC’s medium-term note program will support the continued growth of the housing finance market in Tanzania. In addition, it will allow us to diversify our sources of funding, ”said Oscar Mgaya, CEO of TMRC.

“TMRC’s medium-term note program contributes to the development of debt capital markets in Tanzania and provides alternative investment instruments to institutional and private investors,” said Frank Ajilore, IFC Resident Representative for Tanzania . “Improving access to affordable housing finance, with longer repayment terms, will make home ownership more accessible to Tanzania’s emerging middle class.

The bond listed today is the third tranche of TMRC’s TZS 120 billion ($ 54 million) Medium Term Note (MTN) program designed to develop the housing market in Tanzania. TMRC leverages the bond to secure long-term and more diversified funding by attracting institutional and private investors and encouraging private sector participation in capital markets. TMRC will repurchase this five-year MTN in 2026. By gradually shifting the bulk of its funding requirements to financial market sources, the MTN program is expected to reduce TMRC’s dependence on public sector funding.

IFC has been a shareholder of TMRC since 2019. IFC’s investment in the company is supported by the Local Currency Facility and the Blended Finance Facility of the International Development Association (IDA).

About Tanzania Mortgage Refinance Company Limited (TMRC)

Tanzania Mortgage Refinance Company Limited (TMRC) is a specialized private sector financial institution that provides long-term financing to financial institutions for mortgage lending purposes. Since its inception, TMRC has helped extend the term of mortgages available in the market from 5-7 years in 2011 to 25 years today. Its objective is to help financial institutions grant mortgages by refinancing the mortgage portfolios of major mortgage lenders (PML). This type of loan is also known as a wholesale or secondary market loan. TMRC does not accept deposits or lend directly to individuals. It refinances mortgage portfolios rather than individual mortgages and targets banks rather than individual borrowers. For more information visit http://www.tmrc.co.tz/

About the IDA Private Sector Window

As part of IDA18’s record $ 75 billion replenishment, the World Bank Group established the $ 2.5 billion IDA private sector window to catalyze private sector investment in poorest and most fragile countries. Recognizing the key role of the private sector in achieving the IDA18 goals and the Sustainable Development Goals, the window provides concessional funds for co-investment alongside private investments from the IFC and the Multilateral Guarantee Agency. investments (MIGA). Concessional funds help mitigate risk and reduce barriers, which unlocks and attracts private investment in emerging markets. For more information visit: https://ida.worldbank.org/psw

About IFC

IFC, a member of the World Bank Group, is the world’s largest private sector-focused development institution in emerging markets. We work in over 100 countries, using our capital, expertise and influence to create markets and opportunities in developing countries. In FY2020, we invested $ 22 billion in private businesses and financial institutions in developing countries, harnessing the power of the private sector to end extreme poverty and foster shared prosperity. For more information visit www.ifc.org

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