Merger lifts Azania Bank to top mortgage lender

Dar es Salaam. The recent merger with Bank M Tanzania has enabled Azania Bank to become the leading mortgage lender in terms of market share.

The report by Bank of Tanzania (BoT) has shown that after the merger, Azania Bank now accounts for 22 per cent of mortgage market share, higher than any other lender with a combined portfolio of Sh78 billion.

Before the merger, Azania Bank was the fourth with eight per cent market share valued at Sh59 billion, behind CRDB with 12 per cent (Sh39 billion), Bank M with 14 and Stanbic Bank, which leads the pack with 17 per cent.

As in the first quarter of last year, Tanzania has a total of 31 mortgage lending banks with 4,902 mortgage accounts valued at Sh340.92 billion.

DCB has the highest number of accounts amounting to 805 valued at Sh8.9 billion, which indicates that the bank was serving low income earners and low costs housing projects.

Other banks with the highest number of mortgage accounts include Azania Bank, Akiba Commercial Bank (ACB), Yetu Microfinance and CRDB Bank.

The Tanzanian housing demand is estimated at 200,000 houses annually and a total housing shortage of three million houses has also been boosted by easier access to mortgages.

The ratio of outstanding mortgage debt to Gross Domestic Product (GDP) stood at 0.33 per cent during the first quarter of last year and typical interest rates offered by mortgage lenders ranged between 15 -19 per cent.

The Tanzanian housing sector’s fast-growing demand is mainly driven by the strong and sustained economic growth with GDP growth averaging 6 to 7 per cent over the past decade.

The fast-growing Tanzanian population which is estimated to be 55 million and is expected to more than double by 2050 will also create the growing demand of affordable housing.