REASONS OF EQUITY BANK TANZANIA SUCCESS IN MORTGAGE LENDING

Equity Bank Tanzania acting Sector Head Corporate Banking, Richard Wamboga said the bank has been serving clients of all sizes ranging from individuals seeking to build or buy residential houses to corporations seeking to acquire office or commercial space.

Equity Bank which according to Bank of Tanzania’s Mortgage Market Update Report for the second quarter of 2016 with a staggering 20 percent of market share, started issuing mortgage loans in 2012.

“Our main secret for the success is simply speed and accuracy in providing services to our customers. When customers apply for mortgage loans, we make sure that we give them feedback within fourteen days,” Wamboga said.

He noted that the country’s mortgage market is still virgin with a lot of potential hence Equity Bank will continue to dominate it because it has the resources and strategy to disburse loans at faster pace.

“Our focus on mortgage loans which target commercial buyers is also a factor which has contributed to our bigger volumes of loans, we provide loans to not less than 50 customers per month,” the Equity Bank officials noted.

On his part, DCB Bank Plc which is one of the worst performers with only 2 percent of the mortgage lending market in the country, Loan Manager, Godwin Mngulu told Property Watch that they have the potential and strategies to conquer the mortgage market but are mainly focusing on low income families.

“We are mainly focused on serving ordinary people through our housing microfinance scheme hence the loan sizes are smaller,” Mngulu said. He said their loan portfolio only provides 30m/- as maximum amount because that’s what low income ordinary families can afford to repay.

“We target low income ordinary people because the bank’s main objective is to serve the majority underdogs and not big business or rich people,” he noted.

DCB Bank Plc which was established as Dar es Salaam Community Bank almost a decade ago, started issuing mortgage loans in 2011. 

The bank which was established with focus to serve residents of Dar es Salaam, has since become a big commercial bank listed at Dar es Salaam Stock Exchange and has plans to open its first branch outside Dar in Dodoma before the end of this year.

Mngulu said one of the major challenges that they are facing is lack of surveyed land as most of their clients have plots with no title deed.

“Most of our customers’ land is not surveyed and therefore has no title deed which makes it difficult to accept as collateral for a mortgage loan,” Mgulu pointed out.

According to BoT’s quarterly report for month ending June 2016, Equity Bank was the market leader commanding 20 percent of the mortgage market share, followed by Diamond Trust at 16 percent, Stanbic at 11 percent, and Bank M at 10 percent and Azania Bank at 9 percent.

“More positive developments are expected in the market with more banks now launching their mortgage loan products as competition in the traditional banking products continues to intensify.

Whereas large banks such as National Microfinance Bank (NMB), CRDB and National Bank of Commerce launched their mortgage products in previous years, Standard Chartered Bank and Diamond Trust Bank which ranked 4th and 7th respectively in terms of banking market share in 2015 have entered the mortgage market during the first half of 2016,” the report stated.