Affordable Housing Finance

November 2022

Indicative Return:

5% – 10%

Investment Timeframe

Long Term (10+ years)

Business Model Description

Provide project financing for the development and purchase of residential estates and commercial buildings through affordable and flexible mortgages targeting low-income communities outside of the formal banking system. The government allocates suitable land for the developments and fastracks the issuance of necessary permits, including title deeds.

Expected Impact

Provide safe housing to those outside of the formal banking system, and contribute to urban planning with improved health and environment management.


Central, Eastern

Infrastructure > Real Estate

Direct Impact SDGs:

Indirect Impact SDGs:


Infrastructure is both a facilitator for development and an attractive investment channel. However, the sector is faced with persistent structural challenges, including a heavy dominance of inefficient parastatals in infrastructure provision, accompanied by a poor track record for privatization and private involvement in utilities in the past (1).

Policy priority: The government is committed to develop quality and reliable infrastructure that promotes socio-economic development of Tanzania. Particular emphasis is placed on the provision of quality and safe construction works of roads, bridges, ferries, airports, buildings, mechanical, electrical and electronics in collaboration with private stakeholders (2).

Gender inequalities and marginalization issues: Despite legal protection granted by laws and enforcement mechanisms, discrimination against women in accessing infrastructure and especially land persists in Tanzania. It emanates from the frequent application of customary laws, and an unfamiliarity with formal laws among local leaders and authorities (10).

Investment opportunities introduction: Tanzania’s strong growth in real GDP from 4.1% in 2021 and 5.8% in 2022 is expected to promote significant development in infrastructure needs, including human settlement and particularly modern housing facilities as well as waste and agricultural storage solutions (5, 6).

Key bottlenecks introduction: The growth rate of urban areas in Tanzania has often been higher than the capacity of authorities to cope with the provision of basic services, including delivery of planned, surveyed and serviced land for housing development as well as waste management and horticulture infrastructure (7).

Real Estate

Development need: One of Tanzania’s greatest long-term developmental challenges has been providing citizens with access to decent and affordable housing especially by the lower and middle-income segments of the population. Over 40 percent of Tanzania’s urban population are living in slums, lacking decent and affordable housing (4,13)

Policy priority: The government seeks to work with the private sector in supporting the development of sustainable human settlements. The public sector’s involvement in the enhancement of housing and other constructed facilities focuses on assisting in the mobilization of financial resources as well as capital investments (3).

Gender inequalities and marginalization issues: Challenges in accessing finance impose significant constraints on women’s productivity, including in real estate. Access to finance is the most common challenge faced by women entrepreneurs when starting and growing their own businesses (11).

Investment opportunities introduction: Real estate opportunities include the development and management of housing estates, residential apartments, office buildings, conference and banquet facilities, shopping malls, hotels, and the provision of home financing (6, 8).

Key bottlenecks introduction: Tanzania’s real estate market is dominated by individual home-builders and public agencies. The private sector, which caters for approximately 3.9% of the supply, is still at nascent stages and comprises of a limited number of actors, such as Avic, Nevada Properties, Estim, Group4 and Quality Group (9).

Market Size and Environment
Critical IOA Unit

Housing deficit of 3 million units

Tanzania’s real estate sector contributed 3.1% to the country’s real GDP with USD 1.5 billion in 2019, compared to USD 1.2 billion in 2015, an increase of 25% (12).

Tanzania is experiencing rapid population growth of 3.11% annually and an urbanization rate of 5.22% This trend is expected to spur increased demand in housing and associated financing (9).

Tanzania’s housing demand far outstrips supply. It has been increasing by about 200,000 units annually, with the current housing deficit estimated at about 3 million units (9).

Indicative Return

5% – 10%

Investment Timeframe

Long Term (10+ years)

Mortgage repayment periods under the Tanzania Mortgage Refinance Company (TMRC) were extended from five years to up to 25 years, and interest rates were brought down from above 21% to 15% per year. This can raise investor cashflow (13).

In Tanzania’s real estate sector, the typical mortgage term is 20 years with some banks offering shorter or longer payment periods, between 10 years and 25 years (17).

Ticket Size

USD 1 million - USD 10 million

Market Risks & Scale Obstacles

Market – High Level of Competition

Market – Volatile

Capital – Limited Investor Interest

Sustainable Development Need

A rapid urbanization rate of 35.2% and a population growing at 2.93% per year present a challenge to Tanzania’s housing sector. However, the stringent conditions set by the large financial institutions has led to high dependence on non-mortgaged sources of housing finance. (8, 29, 34).

Over 1.2 million houses in Tanzania, particularly in the urban centres, are built informally, often in unplanned settlements. This translates into a critical need for making serviced land available for shelter and human settlement development as well as providing requisite infrastructure and social services (8).

Over 40% of Tanzania’s population in urban areas live in informal settlements, which are often associated with poor basic amenities. Unplanned settlements have inadequate service levels, tenure insecurity and poor hygiene and sanitation (8, 20).

Expected Development Outcome

Affordable housing finance contributes to Tanzania’s goal of promoting sustainable human settlements. It will lead to improved services such as, solid waste management, service delivery and access to sanitation and hygiene facilities with better environmental management. (3, 11,35).

Primary SDGs addressed

Secondary SDGs addressed

Directly impacted stakeholders

People: Poor households living in unplanned settlements get access to affordable and decent housing with basic service provision.

Gender inequality and/or marginalization: Women, the urban poor commuities and other marginalised groups (including the youth) are able to access affordable, flexible and low cost housing options

Planet: The environment benefits from planned human settlements with better environmental management.

Corporates: Real estate companies as well as their suppliers obtain enhanced market opportunities, including for basic and extended service provision. Businesses have access to affordable offices and industrial outlets, such as warehouses

Public sector: The government benefits from decent housing available for its people, including improved basic service management.

Indirectly impacted stakeholders

People: Urban communities obtain income generation opportunities in housing estates to take advantage of improved services.

Gender inequality and/or marginalization: Women, youth and poor communities will enjoy secondary benefits such as opportunities to open small businesss in the planned settlements

Planet: The planet enjoys safe management of basic services, such as water and sanitation.

Corporates: Businesses selling housing materials, fittings and accessories enjoy greater demand for their products, and secondary businesses, such as small shops obtain new income generation opportunities.

Outcome Risks

The investment can trigger increased demand for services and public infrastructure upgrading programme beyond the capacity at which the municipal and town management authorities can afford (37).

Impact Risks

Communities living in unplanned settlements may be reluctant to move to new estates, as has been observed before, which may limit the expected impact (30).

The middle and upper class which already have access to other means of financing could oversubscribe and crowd out the low-income communities hence reducing the impact of the IOA (38, 39, 40).

There are cases of purported unwillingness of borrowers to service their loans and the difficulties that surround foreclosure. This could obstruct the impact of the IOA (41)

Impact Classification

B—Benefit Stakeholders


Affordable housing finance provides greater access to safe housing and contributes to urban planning with improved health and environment management.


Low-income communities outside the formal banking system, basic service provides and providers, as well as the planet benefit from affordable housing finance.


While the Affordable Housing Finance Model is proven, the potential for middle and upper class to crowd out the low-income communities and default of mortgage repayment require consideration

Impact Thesis

Provide safe housing to those outside of the formal banking system, and contribute to urban planning with improved health and environment management.

Policy Environment

National Human Settlement Development Policy, 2000: Aims at improving access to land by all sections of the society and promote equity in land holding and increase efficiency in land administration (21).

National Construction Policy 2003: Outlines government commitment to promote construction industry through private sector involvement and assisting in the mobilization of financial resources and promoting the optimum use of low cost and local building materials (42)

National Land Policy, 2016: Provides equal access to land for both women and men and recognizes the right of the most vulnerable and indigenous communities (23).

Financial Environment

Financial incentives: The government’s Tanzania Mortgage Refinance Company (TMRC) provides medium- and long-term liquidity to mortgage lenders to offer families loans for new homes or improve their existing homes (13).

The government may identify projects and grant special strategic investment status, if the investment capital transaction is undertaken through registered local financial and insurance institutions. This applies to housing finance as well (28).

Other incentives: Zero percent (0%) Import Duty on Project Capital Goods including building materials (28).

Regulatory Environment

Land Act, 1998: Facilitates an equitable distribution of and access to land by all citizens and ensures that land is used productively within the principles of sustainable development (25).

Urban Planning Act, 2007: Provides for the orderly and sustainable development of land in urban areas; and offers to preserve and improve amenities, to provide for the grant of consent to develop land and powers of control over the use of land and to provide for other related matters (26).

Mortgage Financing Act, 2008: Declares that mortgage money shall be invested in Tanzania. Also provides other guidelines such as the maximum aggregate amount which may be advanced and outstanding at any point in time; responsibility of the mortgagor; responsibility for applicants to give correct information; mortgage arrangements etc (43).

Investment promotion Act No. 6, 2004: Promotes and facilitates investment by assisting investors including in Housing Finance in obtaining the licences necessary to invest and by providing other assistance and incentives and for related purposes (24).

To expand the housing finance market, the Tanzania Mortgage Refinance Company (TMRC) was created to provide medium-and-long-term liquidity to mortgage lenders. During the project period, 5,000 mortgages and 2,000 housing micro-finance loans were provided. Nearly 34% of the beneficiaries were women (13).

Watumishi Housing Company (WHC) a property developer and a licensed fund manager for management of the WHC Real Estate Investment Trust (WHC-REIT). WHC-REIT was licensed by the Capital Market and Security Authority (CMSA) in 2015 and became the first fully-fledged real estate investment trust established in Tanzania and East Africa (14).

Private sector

Tanzania Mortgage Refinance Company (TMRC)

City Mortgage and Finance Corporatioin

First Housing Finance Tanzania Ltd

Mzalendo Credit Ltd

Night Frank

Cyton Real Estates

Gimco Africa Property Management Limited

Whiteknights Real Estate Investment Analysts Co. Ltd.


Ministry of Urban Planning and Human Settlements, National Housing Corporation (NHC)

Tanzania Building Agency (TBA)

Ardhi University

Tanzania Mortgage Refinance Company (TMRC).


World Bank Group (WBG)

African Development Bank (AfDB).


Tanzania Development Foundation

Ace Africa Developing Communities

Globalized and Enlightened Society Organisation

Centre for Community Initiatives (CCI)

Sustainability in Action (SiA)

Association of Real Estate Professional of Tanzania

Public-Private Partnership


Sector & Subsector Sources

1), 2022,
2) United Republic of Tanzania, Ministry of Works and Transport Strategic Plan, 2021/22 – 2025/26
3) United Republic of Tanzania, National Construction Policy, 2003
4) International Journal of Advance Research And Innovative Ideas In Education · October 2020: Challenges Facing Real Estate Marketing and Its Impact on Economic Development in Tanzania
5) African Development Bank, Tanzania Economic Outlook, 2021
6) United Republic of Tanzania, Third National Five-Year Plan (FYDP 3), 2021
7) International Journal of Social Science Studies Vol. 6, No. 12; December 2018
8) Centre for Affordable Housing Finance in Africa (CAHF), 2019
9) Cytonn Real Estate, Dar es Salaam Market Research Cautious Investment. January 2018
10) Kerbina Joseph Moyo, Women’s Access to Land In Tanzania, The Case of the Makete District, Royal Institute of Technology (KTH) Stockholm 2017
11) K4D, University of Birmingham, Barriers to women’s economic inclusion in Tanzania, 2018

IOA Sources

13) The World Bank, Making Housing Affordable and Accessible with Market-based Solutions: Innovative Financing to Address Housing in Tanzania, 2020)
14) Ministry of Lands, Housing and Human Settlements Development, the Present Housing Challenge in Tanzania and Efforts Towards Provision of Affordable Housing, 2015
15) Knight Frank, Tanzania Market Update, 2019
16) Global Property Guide, Tanzania, 2005
17) Centre for Affordable Housing in Africa-Affordable Housing in Tanzania, market Shaping Indicators, 2020
18) Landresa, Women’s Land Rights Guide for Tanzania, 2014
19) Fordham International Law Journal, A Home in the City: Women’s Struggle to Secure Adequate Housing in Urban Tanzania, 2011
20) UN-Habitat, National Urban Profile Tanzania, 2009
21) URT, National Human Settlement Development Policy 2000:
22) URT, National Land Policy, 1997
23) URT, The National Land Policy 2016
24) URT, Investment Promotion Act No. 6 of 2004:
25) URT, Land ACT, 1998
26) URT, Urban Planning ACT, 2007
27) PricewaterhouseCoopers, Tanzania Corporate – Tax Credits and Incentives, 2022
29) Statistica.Com:
30) ESRF Policy Brief No. 4/2013, Challenges Facing Land Ownership in Rural Tanzania
31) The Journal of Urbanism, No 26 Vol 1/2013, The Power of Informal Settlements, The Case of Dar es salaam, Tanzania
32) The United Nations University World Institute for Development Economics Research (UNU-WIDER), WIDER Working Paper 2017/168, The effects of land Titling in Tanzania,
“33) Global SDG Indicator Platform,

34) Research Gate, Access to Housing Finance by the Urban Poor: The Case of WAT-SACCOS in Dar es Salaam, Tanzania
35) Research Gate, Access to Housing Finance by the Urban Poor: The Case of WAT-SACCOS in Dar es Salaam, Tanzania
36) WHO/UNICEF Joint Monitoring Programme (JMP) for Water Supply, Sanitation and Hygiene, Tanzania Database, 2021
37) Africa Housing Finance Yearbook 2020
38) Mkango, Adella, Overview of Housing Finance for Low Income Group In Tanzania A Case Of Dar Es Salaam City, 2014
39) Tanzania Mortgage Refinance Company, Tanzania Mortgage Market Update, 2020
40) Housing Development Financing Corporation (HDFC), Why Tanzania Mortgage Market Uptake Still Low, 2018
41) FINMARK Trust, Access to Housing Finance in Africa, Exploring the Issues, Tanzania 2010
42) United Republic of Tanzania, National Construction Policy 2003
43) United Republic of Tanzania, Mortgage Financing Act, 2008