JK tells banks to help people build houses
President Jakaya Kikwete has challenged banks in Tanzania to invest in mortgage financing to enable more people to build residential houses.
By Guardian Reporter
President Jakaya Kikwete has challenged banks in Tanzania to invest in mortgage financing to enable more people to build residential houses.
He threw the challenge on Tuesday night when addressing bankers at a dinner party in Dar es Salaam hosted by the Tanzania Bankers Association.
“I am informed that some banks have floated and others are considering floating bond products of long-term nature in a move to address the lack of long-term financing�I commend them for the move,“ he said.
“It is impossible for the majority of Tanzanians to build houses from their own savings alone. Remember, shelter is one of the three basic needs of humankind,“ he added.
The President reaffirmed the government`s commitment to put in place a process that would enable more Tanzanians to own houses.
Commenting on the growth of the banking industry, he said Tanzania has made encouraging headway over the last two decades.
He attributed the success mainly to reforms made in such areas as land and labour laws as well as the legal system in general.
“Currently, there are 33 mostly private banks and financial institutions operating in the country in addition to many private forex bureaus and insurance companies. There is also a growing stock market,“ he said.
President Kikwete also hinted on major plans by the government to diversify sources of power while looking for ways to manage the power sub-sector better.
“We have taken measures, as a consequence, to increase power generation capacity from natural gas and coal.
This will ensure reliable power supply which is essential for the proper functioning of the economy,“ he observed.
He explained that the government would continue to work with the financial sector and other private sector players, with a view to making Tanzania more investor-friendly.
The President called on bankers to address public complaints relating to their operations, particularly seeking a solution to the present huge spread between lending and deposit rates and reducing the cost of credit and of doing business in Tanzania.
He advised the bankers to expand services to the rural areas, where most Tanzanians live.
“I have heard that the banking sector prides itself with a network of 294 branches and agencies, and 176 automated teller machines.
Unfortunately, most of these are concentrated in the urban areas, leaving the bigger portion of our vast country without financial services,“ noted President Kikwete.
He added that he was confident that bankers would assist in the provision of financial services in the rural economy without necessarily compromising their returns on investment.“
TBA Chairman Mayank Malik had earlier said the value of bank assets in the country rose from 2.2tn/- in 2002 to 6.6tn/- last year.
He said the positive development was in part due to the robustness of the national economy that was prompted by the existence of good governance.
However, he cautioned that the country still has a long way to go to catch up with developed countries where the value of bank assets usually exceeds gross domestic product.
Source: Guardian
