As the Tanzanian population bulges, the number of homeless people and those who live in inadequate shelter in this country rises too.
The problem is getting worse because the current pace of house construction has failed to keep up with demand.
Human settlements in many developing countries are deteriorating mainly as a result of the low levels of investment by governments and the private sector, each side blaming the inadequacy of resources.
While everybody welcomes the move taken this week by eight commercial banks to provide mortgage financing in Tanzania, there is urgent need for the banks and the National Housing Corporation (NHC) to enlighten would-be mortgagors in order to avert problems that can get the whole scheme bogged down.
Though the government realised the need and importance of adequate housing for the people right away from the end of colonial rule, the Tanzanian housing market has never been vibrant.
The country`s towns and cities have maintained an unchanged rundown image as most of their buildings aged, business areas turned into slums and suburbs mushroomed chaotically.
A lot of reasons would be given for the failure of our urban settlements to make progress. But as experience on the ground suggests, at the centre of this stagnation was the missing link between housing demand and housing finance. There was no way the housing market could flourish without mortgage finance, which gives wage earners the opportunity to purchase and improve their own houses.
It is encouraging to notice now that policymakers have recognised the link between housing and the financial market. The financial sector, however, is not well developed and great care should be taken in mortgage lending as recent scams by unscrupulous businesspersons are still fresh in the people`s memory.
The public should expect banks providing mortgages to follow best practice in fraud detection and whenever mischief is suspected, they should turn to professional consultants for assistance or advice. It makes more sense that way rather than waiting for closure of the mortgage window.
Following the rule of thumb in developing countries, Tanzania`s mortgage market will definitely kick off in Dar es Salaam and probably in other few cities upcountry, where the commercial banking sector has taken root and there are a reasonable number of potential borrowers.
These factors are usually taken into account so that lending can be done on a cost-effective scale and new homes can hit the best price. It will also be very important to guard against mortgage delinquency.
As the outlook now is positive for improvement of urban infrastructure in the country, managers of financial services will make a greater score if they look for expansion opportunities focused on rural housing as well.
There is no doubt that Tanzania is urbanising but the majority of the population are most likely to remain rural for the next half century. Housing in villages is not up to standards that ensure comfort and security. People live in huts, some of which may have TV aerials above their thatched roofs, but they are not cosy inside.
Village housing requires transformation while urban centres should go for renewal—all with the aim of stimulating the overall health of the nation`s economy. Improved living conditions for families should motivate people to save money and at the same time increase consumer spending on other essentials, including education and investment in projects that can make more money.
As seen in China in recent years, a continual rise in consumption spawned shopping malls, restaurant chains and whole new industries that rely on buoyant personal spending. In turn, all this has generated jobs that have given people the confidence to borrow more.
It is that kind of process we need as soon as possible in Tanzania to keep the economic wheel spinning. A well functioning housing market should yield enhanced economic and social mobility within urban markets and regionally, in addition to providing improved labour market mobility, diversity and accessibility.
Hopefully, it will not take long before Tanzania`s cities, towns and townships experience a housing market boom and regain their lost glitter, provided they put up affordable houses.
Local authorities would do a commendable job to avoid horizontal expansion of towns for the sake of filling their coffers by selling land to developers of real estate.
Construction of condominiums has in recent years become the leading segment of the market for mortgage lending in many African countries. But in a country where corruption seems to wheel every deal, policymakers must show a clear determination to discourage fortune-hunters who can infiltrate the market and turn it speculative.
See original article:http://thecitizen.co.tz/magazines/-/16758-it-is-possible-to-get-homes-for-all