Support with Phase 2 of housing finance retail product piloting, capacity building and end of project reporting in Tanzania

In August 17, 2022 Tanzania Mortgage Refinance Company (TMRC) signed a memorandum of understanding with Habitat for Humanity International (HFHI) to expand and strengthen the low-income housing finance sector in Tanzania. Focusing on Housing MicroFinance (HMF), the partnership aimed to support lower-income Tanzanians and those working in the informal sector to more easily purchase, build or upgrade their homes, a segment of the population that has traditionally been underserved by the housing finance sector. Through this partnership we aimed to realize the goal of expanding access to home ownership for all families, and hence aiming to unlock new HMF opportunities for low-income families. We believe there is a tremendous potential in Tanzania’s housing finance market to reach low-income families and through TMRC who is a wholesale lender we are eager to build a case for HMF in the country and explore how financial institutions can tap into this market through tailoured loan products.

Tanzania has one of the fastest growing economies in the world, although the HMF sector is still in its nascency hence, many families still struggle to access adequate and affordable housing. The Center for Affordable Finance in Africa estimates that Tanzania has a backlog of over 3 million homes, with demand growing by 200,000 homes annually. The high cost of formal financing options and limited affordable housing supply remain as key barriers. It is therefore critical that our efforts to expand the market are data-driven and informed by a strong understanding of low-income families’ housing needs across the country.

In March 2010, the Government signed an agreement with the International Development Association (IDA) for the Housing Finance Project (HFP), aiming at creating and developing a sustainable, market-based mortgage market through the provision of medium and long-term liquidity to mortgage lenders. To that effect, the HFP has three components namely: Development of the Mortgage Market, Development of Housing Microfinance and Expansion of Affordable Housing Supply

As part of the implementation of component one of the HFP, TMRC was established in 2010 and became operational in 2011, as a Mortgage Liquidity Facility (MLF), a secondary market financial institution offering long term loans to Primary Mortgage Lenders (PMLs) for the sole purpose of PMLs extending residential mortgages to their clients.

About Tanzania Mortgage Refinance Company Limited (TMRC)
Tanzania Mortgage Refinance Company Limited (TMRC) is a specialized private-sector financial institution that provides long-term funding to financial institutions for mortgage lending purposes. Since its inception, its objective has been to support financial institutions to do mortgage lending by refinancing Primary Mortgage Lenders’ (PMLs’) mortgage portfolios. This type of lending is also known as wholesale or secondary market lending. TMRC is neither taking deposits nor lending directly to individuals. It refinances mortgage loan portfolios rather than individuals mortgage loans and caters to banks rather than individual borrowers. . TMRC membership is open to banks and non-banking institutions which have an interest in the development of the housing sector with 32 banks and financial institutions in its portolfio currently.

To date, TMRC has implemented this role fairly well with the outstanding loan book growing to TZS 145.2 billion in June 2022, out of the total market mortgage portfolio of TZS 510 billion, implying that TMRC financed 28% of the market portfolio. TMRC has also helped to extend mortgage tenor in the market from 5 – 7 years in 2011 to 15 – 25 years in 2022, growing its number of shareholders from 4 to 17 including international investors such as Shelter Afrique and International Finance Corporation (IFC). The overall mortgage market in Tanzania has grown from Tzs 76 billion in 2011 to Tzs 510 billion in June 2022.

TMRC with support from HFHI is now considering building a case for HMF in Tanzania and explore how the financial institutions can tap into this market through tailored loan products.

About Habitat for Humanity International
Driven by the vision that everyone needs a decent place to live, Habitat for Humanity began in 1976 as a grassroots effort and has since grown to become a leading global nonprofit housing organisation working in more than 70 countries, nine of them in Africa. Through financial support, volunteering or adding a voice to support affordable housing, everyone can help families achieve the strength, stability and self-reliance they need to build better lives for themselves.

About Habitat’s Terwilliger Center for Innovation in Shelter (TCIS)

The Terwilliger Center for Innovation in Shelter (TCIS), a unit of Habitat for Humanity International, works with housing market systems by supporting local firms and expanding innovative and client-responsive services, products and financing so that households can improve their shelter more effectively and efficiently. The ultimate goal of the Terwilliger Center’s market systems program is to make housing markets work more effectively for people in need of decent, affordable shelter, thereby improving the quality of life for low-income households.

Objective
As part of the supporting the market to enable development and access of affordable housing finance in tanzania, TMRC and HFHI interned into partnership to help the market with skills to develop a housing microfinacne product(s) for the majority of Low Income Households who are excluded.

HFHI and TMRC recruited Microsave consulting to support with offering Technical Assistance for the product development for two (2) partners financial providers. To date, product development has been completed and hence in conjunction with its partner TMRC, HFHI is seeking to engage a company/consultant to are looking for consulting services to support with the below as phase 2:

Facilitate Capacity Building of 2 FSP’s in rolling out the retail products:
Design and prepare training materials for the board and Financial Service Providers (FSPs).
Conduct the training physically for two days with 10 -15 participants from TMRC and the training implementing partner staff
Conduct Training of Trainers (TOT) on the developed product
Support with pilot implementation:
Support the two (2) partner financial institutions to develop a pilot implementation plan
Develop project evaluation and impact measuring metrics with the bank
Conduct end-term pilot evaluation and make recommendations on product rollout or extension of the pilot
Project reporting:
Conduct project evaluation and impact reporting
Data collection and analysis
Scope of Work
HFHI, TMRC and the consultant will work together to design the Training of Trainers manuals and program, conduct the training for all stakeholders, support during pilot including pilot evaluation, conducting pilot and project review of the housing microfinace products rolled out by the two implementing financial institutions partners.

The consultant or consulting firm will be expected to undertake the following activities:

Capacity Building
Work with TMRC and the two implementing financial institutions to design and create a robust capacity building plan for the partner staff, TMRC staff and other key stakeholders as stipulated in the project plan to agree on the final detailed scope and training implementation plan. This includes;

Designing and preparing training materials for the board and Financial Service Providers (FSPs).
Conducting the training physically for two days with 10 -15 participants from TMRC and other implementing partners
Conducting Training of Trainers (TOT) on the developed product
Pilot Implementation Support
Working with the financial providers implementing partners to develop an implementation plan for product piloting and evaluation based on already defined project scope and outcomes. This includes;

Supporting the 2 implementing partners to develop a pilot implementation plan
Developing project evaluation and impact measuring metrics with the implementing FSP’s
Conducting end-term pilot evaluation and make recommendations on product rollout or extension of the pilot
Project Reporting
Provide overall project report based on the scope of work provided. This includes;

Conducting project evaluation and impact reporting
Data collection and analysis during the pilot period
Support in development of MEAL reports
Provide any recommendations for the successful roll out products in the market
Deliverables and Milestone
Activity

Timelines

Deliverable

Capacity Building

10 Dec 2024 – 30 Dec 2024

ToT training manual/materials developed
Capacity building for all the partner members (10 – 15 approx)
Capacity building report developed
Pilot Implementation Support

02 Jan 2025 – 30 June 2025

End of pilot implementation report
MEAL report
Project reporting

01 July 2025 – 30 Sept 2025

Project evaluation and impact report
Pilot evaluation report
Eligibility criteria
The research company/consultant should:

Have at least 1-2 experiences in development of housing finance retail product in the local context
Detailed Understanding of the Mortgage Refinance Companies and some of their products
Understanding of the Tanzanian Financial market
Assigned personnel should have the relevant qualification in the field of research, product development, and project management
Experience in offering technical support and capacity building
Ability to achieve maximum scope of reach with limited resources
Proposal Evaluation
Proposals will be evaluated based on the consultant’s experience, strategic approach to project management, and cost-effectiveness. The selection will prioritize proposals that demonstrate a clear understanding of the project objectives and the capacity to achieve them.

This consultancy offers a pivotal opportunity to impact the housing microfinance landscape in Tanzania by enhancing the capabilities of TMRC to offer capital/financing through the wholesale product to its members institutions, thereby increasing access to essential financial services for underserved communities.

Proposal will be evaulated based on:

Techncial Skills: Relevant technical skills to achieve the objectives
Experience: Demostrated expertise of the company and individuals
Understanding of the work: Content, quality of the proposal
Cost effectiveness: Cost effective in delivery more scope with limited resources