IFC invests in bond to support access to affordable housing in Tanzania
To help increase access to longer-term, affordable mortgages and housing in Tanzania, IFC subscribed to a corporate bond issued by the Tanzania Mortgage Refinance Company (TMRC), which was listed on the Dar es Salaam Stock Exchange.
The TMRC bond will support access to mortgages, helping Tanzanians more easily purchase homes in a country where access to longer-term financing has traditionally been constrained.
The listing follows approval granted by the Capital Markets and Securities Authority and a successful offer that raised over TZS 8.9 billion ($3.8 million) against a target of TZS 7 billion ($3 million), representing an oversubscription of 27 percent. IFC invested roughly $1.2 million (TZS 2.8 billion) in the oversubscribed bond offer.
"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," said Oscar Mgaya, Chief Executive Officer, TMRC.
The bond listed is the third tranche in TMRC's TZS 120 billion ($54 million) Medium-Term Note (MTN) program designed to develop the housing market in Tanzania. TMRC is leveraging the bond to obtain long-term and more diverse funding by attracting institutional and private investors and encouraging private sector participation in the capital markets. TMRC will redeem this five-year MTN in 2026. By gradually shifting the bulk of its financing needs to capital markets sources, the MTN program is expected to reduce TMRC's dependence on public sector funding.
"TMRC's medium-term note program is contributing to the development of the debt capital markets in Tanzania and providing alternative investment instruments to institutional and private investors," said Frank Ajilore, IFC's Resident Representative for Tanzania. "Increasing access to affordable housing finance, with longer repayment schedules, will make home ownership more attainable for Tanzania's emerging middle class."
IFC has been a shareholder of TMRC since 2019. IFC's investment in the company is supported by the International Development Association's (IDA) Private Sector Window Local Currency Facility and Blended Finance Facility.