The International Finance Corporation (IFC), the private sector investment arm of the World Bank, on Thursday ploughed in $1.2 million (KSh129.8 million) in a five-year corporate bond issued by the Tanzania Mortgage Refinance Company (TMRC), boosting the firm’s efforts to increase access to longer-term, affordable mortgages and housing in Tanzania.
The bond, listed on the Dar es Salaam Stock Exchange, was oversubscribed and it raised $3.8 million against a target of $3 million. It is the third tranche in TMRC’s $54 million Medium-Term Note (MTN) program created to improve the housing sector in Tanzania.
TMRC Chief Executive Officer Oscar Mgaya said, “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. Additionally, it will enable us to diversify our funding sources”.
The issuance of the corporate bond has led to the advancement of the largely underdeveloped capital markets in Tanzania by providing alternative investment options to institutional and retail investors in the country.
IFC’s Resident Representative for Tanzania Frank Ajilore said, “Increasing access to affordable housing finance, with longer repayment schedules, will make home ownership more attainable for Tanzania’s emerging middle class”.
The successful bond issuance is expected to ease pressure on limited public sector funds as the Tanzania Mortgage Refinance Company will rely less on government funding and more on private sector funds to enable more Tanzanians to purchase homes.