CRDB now offers long-term mortgage loans

CRDB Bank is now offering long-term mortgage loans, bringing new hope to millions of Tanzanians whose dreams of house ownership were dampened by high costs of construction materials. In its recent report, a UK-based Global Property Guide (GPG) -- a research firm that sells data to investors in residential property -- said Tanzanians, yearning for homeownership could realise their dreams if they are ready to pay 134 times their annual incomes.

According to GPG, the buying price per square metre in Dar es Salaam is $700 while one pays an average of $500 on rent each month.

But CRDB believes that problems of how to source long term finances for construction, purchasing and renovation of houses will soon become history, thanks to its new product dubbed ‘Jijenge’.

The bank’s managing director, Dr Charles Kimei, estimates that currently, individuals take up to 10 years to put up a simple family house due to regulations associated with what it takes to get a mortgage.

With Jijenge, the mortgage can be repaid for a period of up to 20 years unlike the bank’s previous mortgage schemes that could only be repaid in a period not exceeding five years.

Jijenge, according to Dr Kimei, attracts an interest rate of 18 per cent plus. One also requires a 1.0 per cent insurance cover for the loan.

“Jijenge’ is designed specifically to give a would-be-builder the peace of mind when it comes to constructing and owning a house. The package also caters for a loan to rehabilitate and renovate a house,” Dr Kimei said in Dar es Salaam yesterday.

Workers, entrepreneurs, farmers and fishermen are all eligible for such loans, noting that the interest will be easily recouped through the appreciation of the value for the house as time goes. According to Dr Kimei, the current demand for homes in the country stands at three million units. The demand is increasing at an average of 200,000 units a year but only 15,000 houses are constructed a year.