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Tanzania's National Housing Corporation (NHC) has secured credit of TZS 165 billion (US$105.7 million) from a consortium of nine financial firms to help it meet growing housing demands in the East African country
The NHC director general, Nehemiah Mchechu, signed the loan agreement with representatives of the consortium, which brings together commercial and development banks, a pension fund and a financial institution.
Mchechu said, “The initial target was to raise about TZS 310 billion (US$198.5 million). However, the TZS 165 billion (US$105.7 million) credit will enable us to fulfill some of our projects towards realising 15,000 housing units by the year 2015.
“I ask other banks and financial institutions to support NHC and other real estate developers so that the much-needed affordable houses can be built.”
According to Mchechu, the government had towards the end of last year given a green light to the NHC to borrow funds from local and foreign institutions without necessarily seeking approval from the state.
He added, “We are now looking towards implementation of various projects, including satellite cites in Dar es Salaam, Mwanza, Arusha and Dodoma.”
In 2010, the state-owned real estate developer had initiated an ambitious plan to put up 15,000 units by 2015, at the rate of 3,000 houses per annum.
Estimates put the demand for housing in Tanzania at about three million at present, with the demand growing for an average of 200,000 units a year, according to NHC board chair engineer Kesogukewele Msita.
Minister for lands, housing and human settlements development, Anna Tibaijuka, has described the deal as “the largest loan ever to a real estate developer in Tanzania”.
Tibaijuka said the target of building 15,000 units required a huge amount of construction finance, which also represents a business opportunity to banks and financial institutions.