KCB leapfrogs 5 lenders to claim second spot in Tanzania mortgage market
Friday January 12 2024
KCB Group is the second largest mortgage lender in Tanzania in the nine months ended September 2023. FILE PHOTO | NMG
KCB Group has become the second largest mortgage lender in Tanzania after its subsidiary, in the East African country, nearly tripled its loan book in the nine months ended September.
Latest disclosures from the Bank of Tanzania (BoT), which regulates banking business in Tanzania, show the outstanding mortgage book of KCB Bank Tanzania Limited jumped 2.9 times to Tsh60.08 billion ($23.9 million) at the end of September last year from Tsh21.03 billion ($8.3 million) in the preceding similar period.
The jump saw KCB Bank Tanzania’s market share in the mortgage market hit 10.12 percent, making it the second-highest lender in this category compared with September 2022, when it was ranked seventh with a market share of 4.02 percent.
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The BoT said the average mortgage debt size was Tsh103.46 million ($41,165) in the review period, with typical interest rates offered by mortgage lenders ranging between averages of 15 percent and 19 percent compared with averages of 22 percent to 24 percent in 2010.
KCB Bank Tanzania trailed CRDB Bank Plc, which closed the period with an outstanding residential mortgage book of Tsh197.7 billion ($78.7 million), giving it a market share of 33.3 percent from 37.07 percent in September 2022.
The lender leapfrogged Stanbic Bank Tanzania, Azania Bank Limited, NMB Bank PLC, Exim Bank Tanzania and NCBA Bank Tanzania in the period the overall outstanding mortgage book for the sector grew by 13.5 percent to Tsh593.76 billion ($236 million).
“The Tanzanian housing sector’s fast-growing demand is mainly driven by the strong and sustained economic growth with GDP growth averaging 6.2 percent over the past decade, the fast-growing Tanzanian population, which is estimated to more than double by 2050, and efforts by the government in partnership with global non-profit institutions and foreign governments to meet the growing demand of affordable housing,” said the Bank of Tanzania.
The Tanzania mortgage market is structured in a similar way as that of Kenya, with the Government of Tanzania in 2010 having set up Tanzania Mortgage Refinance Company Limited (TMRC)—an equivalent of Kenya Mortgage Refinance Company—to offer refinancing and pre-financing facilities to primary mortgage lenders.
The growth in Tanzania mortgage book came when the KCB Bank Tanzania unit delivered a 157 percent growth in net profit to Ksh2 billion ($12.5 million), becoming the second most profitable subsidiary for KCB after DRC Congo’s Trust Merchant Bank (Ksh5.24 billion or $32.85 million).
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KCB Group closed September with 16 branches in Tanzania and plans to add six branches to deepen its physical locations in a country where it is eyeing acquisitions after the deal to acquire a 100 percent stake in African Banking Corporation Tanzania Limited collapsed in December 2021.
Central Bank of Kenya’s latest available data showed KCB Bank Kenya leads the mortgage market in Kenya and commanded a market share of 30.4 percent with a mortgage book of Ksh79.55 billion ($498.7 million) at the end of December 2022, followed by Stanbic Bank Kenya with 12.6 percent market share.