Banking and Financial Institutions (Mortgage Refinance Companies)

GN NO. 559 (Contd.)

GOVERNMENT NOTICE NO. 559 PUBLISHED ON 16/9/2022

THE BANKING AND FINANCIAL INSTITUTIONS ACT,

(CAP 342)
__________

REGULATIONS
___________

(Made under section 71)

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THE BANKING AND FINANCIAL INSTITUTIONS (MORTGAGE REFINANCE

COMPANIES) REGULATIONS, 2022

ARRANGEMENT OF REGULATIONS

PART I
PRELIMINARY PROVISIONS

1. Citation.
2. Application.
3. Interpretation.
4. Objectives.
PART II
POWERS AND DUTIES OF BANK OF TANZANIA

5. Powers and duties of the Bank.

PART III
LICENSING

6. Application for license.

7. Principal contact person.
8. Legal opinion.
9. Financial Capacity.
10. Character and experience.
11. Disclosure of intended products and services.
12. Feasibility study.
13. Significant policies and their contents

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 Banking and Financial Institutions (Mortgage Refinance Companies)
GN NO. 559 (Contd.)
PART IV
CREDIT EXTENSION AND QUALIFIED COLLATERAL

14. Credit extensions.

15. Qualified collateral.

PART V
CAPITAL ADEQUACY REQUIREMENTS AND PERMISSIBLE
INVESTMENTS AND RESTRICTIONS

16. Minimum risk-based capital requirement.

17. Permissible investments.

PART VI
LIQUIDITY REQUIREMENTS

18. Liquidity management policies.

19. Adequacy of liquidity.

PART VII
CORPORATE GOVERNANCE REQUIREMENTS

20. Composition of the Board of Directors.

21. Mandate of the Board of Directors.
22. Duties of Directors.
23. Establishment of Board Audit Committee.
24. Senior Management.

PART VIII
INTERNAL AND EXTERNAL AUDITORS REQUIREMENTS

25. Internal Audit

26. Appointment of External Auditors

PART IX
EXAMINATION, REPORTING REQUIREMENTS AND OFFSITE
MONITORING

27. Inspection of books of account and records.

28. Reporting requirements and Off-Site Monitoring.
29. Management take over.
30. End of management by Bank

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PART X
ADMINISTRATIVE SANCTIONS
31. Sanctions.
32. Revocation

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SCHEDULES
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PART I
PRELIMINARY PROVISIONS

Citation 1. These Regulations may be cited as the Banking and

Financial Institutions (Mortgage Refinance Companies)
Regulations, 2022.

Application 2. These regulations shall apply to all Mortgage

Refinance Companies in the United Republic of Tanzania.

Interpretation 3. In these regulations unless the context requires

otherwise:
“Act” means the Banking and Financial Institutions Act;
“Bank” means the Bank of Tanzania;
“borrower” means a bank or financial institution eligible to
borrow funds from Mortgage Refinance Companies;
“core capital” has the meaning ascribed to it in the Act;
“debenture charge” means a document that grants lenders
a charge over a borrower's assets, giving them a means
of collecting debt if the borrower defaults;
“member primary mortgage lender” means a bank or financial
institution that has subscribed share capital to a
Mortgage Refinance Companies.
“Mortgage re-financing business” means the wholesale or
secondary market lending to banks and financial
institutions in order to reduce the liquidity risk incurred
in their provision of long term loans for housing.
“Mortgage Refinance Company (MRC)” means a non-deposit
taking company established under the Companies Act
and licensed by the Bank to conduct mortgage re-
finance business
“non-member primary mortgage lender” means a bank or
financial institution that has not subscribed share capital
to an MRC;
“primary mortgage lender” means a bank or financial institution
involved in mortgage finance and any other entity
approved by the Bank to operate mortgage financing.

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“total capital” has the meaning ascribed to it in the Act.

Objectives 4.-(1) The objectives of these Regulations are to ensure

safety and soundness of MRC’s operations.
(2) These Regulations aim at creating conditions for:
(a) a solid capital base that adequately reflects MRC’s
risks and sufficient to absorb unanticipated losses;
and
(b) good corporate governance, including an informed
and involved Board of Directors, an effective
system of internal controls, disclosure, and
transparency.

PART II
POWERS AND DUTIES OF BANK OF TANZANIA

Powers and 5. The powers and duties of the Bank shall be to-
duties of the
Bank (a) license MRC; and
(b) regulate and supervise MRC business operations
including:
(i) prescribing rules and conditions upon which
MRC may extend credit to its borrowers,
borrow funds, issue debt obligations and
issue, redeem, or transfer stock.
(ii) prescribing liquidity requirements and
permissible investments.
(iii) reviewing MRC’s business and operational
policies, including its Memorandum and
Articles of Association, By-laws, Business
Plan, Capital Plan, Credit Policy,
Asset/Liability Management Policy;
Financial Management Policy, and Code of
Ethics and Business Conduct;
(iv) collecting regular data from MRC’s
operations relating to its lending and the
collateral assigned in its favour.
(v) conducting on-site inspections and off-site
monitoring of MRC’s operations, and
(c) set capital adequacy standards for MRC.

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PART III
LICENSING

Application for 6.-(1) A person who intends to engage in mortgage re-

license
financing business shall apply for a license to the Bank by a
letter in the form prescribed in the First Schedule.
(2) Any person shall, before submitting an application
referred to under sub-regulation (1), apply for a pre-filing
meeting with the Bank.
(3) An application referred to under sub-regulation (1)
shall be signed by the directors of the applicant or a person
authorized by the applicant and be accompanied with-
(a) a copy of each of the documents listed in the Second
Schedule; and
(b) non-refundable application fee of five million
shillings or any other amount as may be determined
by the Bank to be paid through a bankers’ cheque or
other means acceptable to the Bank
(4) A person shall not engage in mortgage re-financing
business unless that person has obtained a license issued by the
Bank.
(5) A person who contravenes the provision of sub-
regulation (4) commits an offence and on conviction shall be
liable to the punishment as stipulated in the Act.

Principal 7. An applicant for a license shall designate a principal

contact person
contact person for application processes and inform the Bank of
the name and address of such a person.

Legal Opinion 8. The Bank may require the applicant to provide a legal
opinion on any issue related to the license application as it may
determine.

Financial 9.-(1) The Bank shall, before granting a licence,

capacity
investigate and scrutinize the financial capacity of the
shareholders.
(2) The financial capacity of the shareholders shall be
measured on-
(a) levels of capital as shown on balance sheets:
(b) the potential financial support may be made
available where MRC requires capital injection for
any reason, including losses in its operations.
(3) The Bank shall assess-
(a) the ability of the shareholders and their business
affiliates to pay their current obligations from their
income,

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(b) reasonability of valuation they assign to their assets,
and
(c) net-worth in relation to other liabilities.
Character and 10.-(1) The Bank shall assess the character and
experience
experience of the proposed members of the Board of Directors
and Senior Management in accordance with the criteria set out
in the Third Schedule to these Regulations.
(2) The criteria referred to under sub-regulation (1) shall indicate
whether the proposed members of the Board of Directors and
Senior Management of MRC are fit and proper persons.

Disclosure of 11. The applicant shall disclose any intended products

intended
products and and services it proposes to provide and how such products and
services services will benefit Tanzania.

Feasibility 12.-(1) The applicant shall provide a detailed feasibility

study
study, business plan and projected balance sheets, income
statements and cash-flow statements for four years.
(2) The business plan under sub-regulation (1) shall, at a
minimum, include MRC’s vision and mission, principal business
activities, organization and management, and planned sources
and uses of capital and other funds. The business plan shall also
include market analyses and business projections under various
scenarios and assumptions.
(3) Without prejudice to a sub-regulation (1) and (2)
referred above, at minimum the applicant shall provide the
following-
(a) draft policies and procedural manuals detailing how
the institution shall operate in a manner consistent
with the principles prescribed in Risk Management
Guidelines issued by the Bank;
(b) description of accounting system, information and
communication technology to be used in the
operations of the institution and proposed future
investment;
(c) number of employees, job descriptions of senior
management positions and an organization chart;
(d) description of internal control procedures that the
institution shall implement;
(e) description of shareholders, Board and senior
management and strategy for the successful
operation of the institution;
(f) Master Servicing and Re-financing Agreement that
governs the lending operations between MRC and
the participating primary mortgage lenders.

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Significant
policies and 13. (1) The MRC shall prepare and submit to the Bank for
their contents review the following significant policies;
(a) Credit Policy which shall describe the credit
products that MRC offers to its borrowers,
including the terms and conditions for issuing
advances, and shall set forth the standards that
MRC shall use to manage credit risk in these
products. The Credit Policy shall, at a minimum:
(i) specify the underwriting criteria to be
applied in evaluating applications for
advances;
(ii) specify the levels of collateralization,
valuation of collateral, and the discounts
that are to be applied to collateral values
securing advances;
(iii) specify the standards and criteria for, and
timing of, periodic assessments of the
creditworthiness of borrowers, obligors, or
other counterparties, and for the
establishment of credit limits;
(iv) specify the fees to be charged for
obtaining, or pre-paying, advances
including any schedules or formulas on
such fees; and
(v) describe the standards and criteria for
pricing products, including differential
pricing of advances.
(b) Asset and Liability Management Policy which
shall describe MRC’s permissible assets and
liabilities set the standards for managing its
interest rate risk and liquidity risk, and delineate
the composition, duties, and operational
procedures of the Asset/Liability Management
Committee.
(c) Financial Management Policy describes MRC’s
financial management policies and procedures,
and its system of internal controls. The policy
shall include, at a minimum; Accounting policies
and principles; Financial record-keeping and
reporting; and Auditing and periodic internal
control testing.
(d) Code of Ethics and Business Conduct shall
specify high standards for honesty, integrity, and
impartiality for employees, officers, and directors

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and guide on avoiding conflicts of interest, self-
dealing, and other types of impropriety.
(2) The MRC shall ensure that the following policies are
prepared and reviewed annually: -
(i) Anti-Money Laundering Policy;
(ii) Risk Management Policy;
(iii) Business Continuity Policy and Plan; and
(iv) Corporate Governance Policy.

PART IV
CREDIT EXTENSION AND QUALIFIED COLLATERAL

Credit 14.-(1) The MRC shall, in discharging its duties, extend

Extensions
credit to its good standing borrowers.
(2) The MRC shall deem a borrower not to be in good
standing if that borrower:
(a) is delinquent on payment obligations at any time;
(b) receives a qualified opinion on its most recent
audited financial statements;
(c) is unprofitable for four consecutive quarters;
(d) fails to meet its capital adequacy requirements as
prescribed by the Bank; or
(e) in respect of whom MRC receives a written notice
from the Bank, expressing material concerns about
the borrower’s financial condition or business
operations resulting from the borrower’s most recent
supervisory inspection.
(3) The MRC credit extensions shall
(a) be fully secured by qualified collateral;
(b) for the provision of sub-regulation (3) (a), a credit
extension shall be deemed fully secured credit when
the qualified collateral covers at least:
(i) 111% of credit amount, for the case of
mortgaged properties;
(ii) 100% of credit amount, for the case of
securities issued, insured, or guaranteed
by the Government of the United
Republic of Tanzania; or
(iii) bank fixed deposits.
(4) The MRC shall not extend credit to any member
primary mortgage lender equal to more than twenty times the
member’s paid up capital in MRC.
(5) The maximum amount of credit accommodation an

MRC may extend to a non-member primary mortgage lender

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shall not exceed the lesser of fifty per cent of;
(a) credit accommodation allowed to member primary
mortgage lender with minimum investment to MRC,
or
(b) core capital of the borrowing non-member primary
mortgage lender.
(6) The MRC shall provide clear disclosures of the
terms and conditions of the advances to its borrowers.
(7) MRC shall set single borrower limits in its credit
policy, and the limits shall comply with any requirement
prescribed by the Bank.

Qualified 15.- (1) Qualified collateral shall be limited to the

collateral
following assets:
(a) first ranking specific debenture charge on the
selected loan portfolio of mortgages which are fully
insured and have not had any arrears over the past
six months;
(b) securities issued, insured, or guaranteed by the
Government of the United Republic of Tanzania;
(c) bank fixed deposits; or
(d) other qualified collaterals shall be limited to those
approved by the board of directors of MRC and
cleared by the Bank.
(2) The MRC shall assess the book value of the
collateral intended to secure the advances being considered, and
at least every six months thereafter for all outstanding advances
(3) The MRC shall require borrowers to provide
additional qualified collateral to compensate for any diminution
in the market value or book value of the pledged collateral
securing their outstanding advances.
(4) The MRC shall require borrowers to provide
qualified substitute collateral if any security or residential
mortgage securing an outstanding advance matures, prepays,
defaults, or becomes more than 90 days delinquent.
(5) The MRC’s outstanding advances to a borrower
shall become due and payable if that borrower cannot provide
sufficient qualified collateral to support its outstanding
advances.

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PART V
CAPITAL ADEQUACY REQUIREMENTS AND PERMISSIBLE
INVESTMENTS AND RESTRICTIONS

Minimum risk- 16.-(1) The MRC shall commence operations and

based capital
requirement maintain at all times a minimum core capital of not less than
thirty billion shillings or such higher amount as the Bank may
determine.
(2) The MRC shall maintain at all times a minimum
ratio of core capital to the value of its risk-weighted assets and

off-balance sheet exposures of not less than ten percent.

(3) The MRC shall maintain at all times a minimum
ratio of total capital to the value of its risk-weighted assets and
off-balance sheet exposures of not less than twelve percent.
(4) The risk weighted assets and off balance sheet
exposures shall be computed in line with procedures as defined
by the Bank.

Permissible 17. (1) The MRC shall not invest more than forty
investments
percent of its financial resources in the following investments:
(a) treasury bonds or equivalent instruments issued by
the Government of the United Republic of
Tanzania.
(b) fixed Deposits in banks and financial institutions
licensed by the Bank.
(2) At no time shall MRC engage in activities that may
lead it to incur foreign exchange, commodity or equity risks or
use financial derivatives except as hedging instruments.
(3) The limit of forty per cent referred to under sub-
regulation (1) shall not apply in the first year of operations of
MRC.
(4) The limit referred to under sub-regulation (3) shall
be reviewed periodically by the Bank after considering the
liquidity needs of MRC.

PART VI
LIQUIDITY REQUIREMENTS

Liquidity 18.-(1) The MRC shall adopt sound and prudent

management
policies liquidity management and funding policies consistent with the
principles set out in the Risk Management Guidelines issued by
the Bank.
(2) The policies under sub-regulation (1) shall at least

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include: -
(a) delegation of responsibility for management of
overall liquidity;
(b) establishment and implementation of effective
techniques and procedures to identify, measure,
monitor, and manage liquidity risk both in
individual currencies and overall;
(c) analysis of net funding requirements under
alternative scenarios; and
(d) contingent liquidity planning.
(3) The liquidity management and funding policies
under sub-regulation (1) shall be reviewed, at least annually or

more frequently as may be necessary to ensure that they remain

appropriate and prudent.

Adequacy of 19. The MRC shall maintain sufficient liquid assets for
liquidity
meeting its maturing obligations and liabilities.

PART VII
CORPORATE GOVERNANCE REQUIREMENTS

Composition of 20.-(1) The board of directors of MRC shall have a

the Board of
Directors membership of not less than five, two of whom shall have
mortgage finance or related experience and the majority of
whom shall be non-executive.
(2) The chairperson of the MRC shall be a non-
executive member of the board.
(3) The MRC shall not appoint any person to hold a
senior management or Board of directors post without obtaining
prior approval of the Bank.

Mandate of the 21. The ultimate responsibility for the MRC operations
Board of
Directors shall be vested to the Board of Directors.

Duties of 22.- (1) The duties of directors under these regulations

Directors
shall be to:
(a) act in good faith, in a manner believed to be in
MRC’s best interests, and with such care, including
reasonable inquiry, as an ordinarily prudent person
in a like position would use under similar
circumstances;
(b) administer MRC affairs fairly and impartially and
without discrimination in favour of or against any
shareholder;
(c) review at least annually, and amend as appropriate,

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the following plans and policies: Business Plan,
Capital Plan, Credit Policy, Asset and Liability
Management Policy, Financial Management Policy,
Code of Ethics and Business Conduct, Anti Money
Laundering Policy, Risk Management Policy,
Business Continuity Policy and Corporate
Governance Policy;
(d) prepare and publish MRC’s annual report, including
financial statements; and
(e) approve annual budgets, financial projections, and
proposed pay-outs of dividends.
(2) The Board of Directors shall ensure that MRC
establishes and maintains an effective internal control system.
(3) The Board of Directors shall establish, document,
and communicate an organizational structure for MRC that
clearly shows the lines of authority, provides for effective
communication, and ensures that there are no gaps in the lines of
authority.
(4) The Board of Directors shall review all delegations
of authority to specific personnel or committees and require that
such delegations state the extent of the authority and
responsibilities delegated.
(5) The Board of Directors shall establish reporting
requirements for senior management, including specifying the
nature and frequency of the management reports it receives.

Establishment 23.-(1) The Board of Directors shall establish an audit

of Board Audit
Committee committee.
(2) The audit committee shall comprise at least three
non-executive directors, two of whom shall have adequate
accounting or related financial management experience.
(3) The Board of Directors shall adopt a written charter
for the audit committee that specifies the scope of the
committee's powers and responsibilities, and its structure,
processes and membership requirements.

Senior 24.-(1). The MRC senior management shall be

Management
responsible for carrying out the directives of the Board of
Directors.
(2) The MRC senior management shall conduct day-to-
day operations of MRC in a safe and sound manner, including
the establishment, implementation, and maintenance of the
internal control system required by these Regulations.
(3) Without prejudice to the generality of subsection (2),
the MRC senior management shall, in conducting its day to day
operations:
(a) ensure that MRC employees fully understand and

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comply with all policies, procedures, and legal
requirements applicable to their positions and
responsibilities, including adherence to approved
risk tolerances and mitigation strategies;
(b) ensure that there is appropriate segregation of duties
among employees and those employees are not
assigned conflicting responsibilities;
(c) ensure that employees receive necessary and
appropriate information and training;
(d) develop and implement operating procedures that
translate the major business objectives, strategies,
and policies established by the Board of Directors
into effective operating standards;
(e) ensure adherence to the lines of authority and
responsibility established by the Board of Directors;
(f) oversee implementation and maintenance of
management information and other operating
systems;
(g) establish and implement an effective system to track
internal control weaknesses and actions taken to
correct them; and
(h) monitor, and report periodically to the Board of
Directors and audit committee about the
achievement of MRC’s business objectives and the
effectiveness of the internal control system.
(4) The senior management shall perform, annually, a
risk assessment that identifies and evaluates material risks,
including quantitative and qualitative risks that may adversely
affect the achievement of MRC’s business and performance
objectives and compliance requirements.
(5) The risk assessment referred to in sub-regulation (4)
shall be in written form and shall be reviewed by the Board of
Directors promptly upon its completion.

PART VIII
INTERNAL AND EXTERNAL AUDITORS REQUIREMENTS

Internal Audit 25. Every MRC shall have an Internal Audit Function
whose head shall report directly to the Board Audit Committee
and shall, inter alia, be responsible for compliance with these
regulations and establish an effective means of testing, checking
and complying with its policy and procedures.

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Appointment of 26.-(1) Every MRC shall, on an annual basis, appoint an
External
auditors external auditor who is registered by the National Board of
Accountants and Auditors and has no conflict of interest in
MRC and notify the Bank within seven days of such
appointment.
(2) MRC shall not remain without an external auditor
for more than ninety days from the date the position falls vacant.
(3) Where MRC fails to appoint an external auditor
under sub-regulation (1) of this regulation or to fill any vacancy
for an external auditor which may have fallen vacant, the Bank
may appoint, on behalf of the MRC, an external auditor and fix
his remuneration which shall be paid by the MRC.
(4) An external auditor shall not audit the same MRC
for more than two consecutive terms of three years.
(5) An external auditor shall rotate the engagement
partner in charge of audit of MRC after every three years.

PART IX
EXAMINATION, REPORTING REQUIREMENTS AND OFFSITE
MONITORING

Inspection of 27.-The MRC shall make its books of account and

books of
account and records readily available for inspection and other supervisory
records purposes within a reasonable period upon request by the Bank.

Reporting 28.-(1) The MRC shall be subject to the Bank’s off-site

Requirements
and Off-Site monitoring and shall make periodic reports in accordance with
Monitoring the form, instructions, and schedules specified by the Bank
including:
(a) monthly call reports including balance sheet,
income statement and capital compliance and
leverage;
(b) quarterly call reports including statements of cash
flow, capital, investments, outstanding advances and
commitments, outstanding liabilities, and member
shareholdings; and
(c) yearly updated projections on its business volume
and on its balance sheet and income statement.
(2) The reports referred to under sub-regulation (1) shall
be submitted no later than the 15th day after the end of each
reporting period.

Management 29.-(1) The Bank may take-over management of an

take over
MRC where-

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(a) the Bank considers that an MRC is not-
(i) in a sound financial condition;
(ii) operating in accordance with sound
administrative and accounting practices
and procedures;
(iii) adhering to proper risk-management
policies; and
(iv) complying with instructions issued by
the Bank;
(b) an MRC fails to comply with the minimum
capital requirements prescribed in these
regulations;
(c) an MRC’s license has been revoked;
(d) the continuation of MRC business is detrimental
to the interests of clients; or
(e) an MRC is undertaking Mortgage re-financing
business in a manner contrary to the Act.
(2) Upon take-over referred to under sub-regulation (1),

the Bank may utilize the services of private persons to manage

the MRC, where the Bank determines that doing so is the most
practicable, efficient and cost-effective manner.
(3) Costs of management of an MRC during the
takeover period shall be borne by the MRC.
(4) During take-over, no attachment or lien except a lien
created by the Bank shall be attached to any property or asset of
the MRC.
(5) A party to a contract with an MRC shall not be
relieved of his obligations on the ground that the MRC is under
the management of the Bank.
End of 30.-(1) Management by the Bank shall end upon
management by
Bank improvement of the MRC’s financial condition and operations or
within six months, whichever comes earlier.
(2) The Bank may extend the six months’ period
referred to under sub-regulation (1) where MRC’s financial
condition and operations have not improved.
(3) The Bank shall, where the financial condition and
operations of the MRC have not improved after the expiry of six
months or the period extended by the Bank under sub-regulation
(2), order liquidation according to the applicable law.

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PART X
ADMINISTRATIVE SANCTIONS
Sanctions 31. Without prejudice to any other penalties or
sanctions prescribed by Act, the Bank may impose one or more
of the following penalty or sanction, where any of the provisions
of these Regulations are contravened-
(a) penalty on the MRC, its directors, officers or
employees responsible for non-compliance in such
amounts as may be determined by the Bank;
(b) prohibition from declaring or paying dividends;
(c) suspension of access to the credit facilities of the
Bank;
(d) suspension of lending and investment operations;
(e) suspension of capital expenditure;
(f) suspension of the privilege to issue debt
instruments;
(g) suspension from office of the defaulting director,
officer or employee;
(h) disqualification of the defaulting director, officer or
employee from holding any position or office in any
licensed bank or financial institution under the
supervision of the Bank; and
(i) revocation of the license.
Revocation of 32. The Banking and Financial Institutions (Tanzania
GN. No.
149 of 2011 Mortgage Refinance Company) Regulations, 2011 are hereby
revoked.

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_______________

FIRST SCHEDULE
_______________
(Made under Regulation 6)
_______________

The Governor,
Bank of Tanzania,
P.O. Box 2939,
Dar es Salaam,
TANZANIA.

Re: Application for a License to carry out mortgage re-financing business

Sir,

We, the undersigned, hereby apply for a license to establish a mortgage refinancing company in
Tanzania to be known as ____________________________________with principal place of
business at ____________________________________

The proposed institution shall have an authorized share capital of ______________ shillings and
paid up capital of _______________ shillings which shall be contributed by the following
subscribers:

Subscribed Shares

Name of Number Amount Amount Percentage of

Subscriber Paid-up Ownership
1. ___________ ____________ ____________ ___________ ____________
_
2. ___________ ____________ ____________ ___________ ____________
_
3. ___________ ____________ ____________ ___________ ____________
_
4. ___________ ____________ ____________ ___________ ____________
_
5. ___________ ____________ ____________ ___________ ____________
_
6. ___________ ____________ ____________ ___________ ____________
_
7. ___________ ____________ ____________ ___________ ____________
_
8. ___________ ____________ ____________ ___________ ____________
_
9. ___________ ____________ ____________ ___________ ____________
_
10 ___________ ____________ ____________ ___________ ____________
_
11 ___________ ____________ ____________ ___________ ____________
. _

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12 ___________ ____________ ____________ ___________ ____________

. _
13 ___________ _____________ _____________ ___________ _____________
. _ __
14 ___________ _____________ _____________ ___________ _____________
. _ __
15 ___________ _____________ _____________ ___________ _____________
. _ __
16 ___________ _____________ _____________ ___________ _____________
. _ __
17 ___________ _____________ _____________ ___________ _____________
_ __
18 ___________ _____________ _____________ ___________ _____________
. _ __
19 ___________ _____________ _____________ ___________ _____________
. _ __
20 ___________ _____________ _____________ ___________ _____________
. _ __
Total

We jointly and severally make a firm commitment to deposit a total amount of paid up capital for the
proposed institution with any bank or financial institution registered in Tanzania such deposit to be
made not later than thirty days after grant of this application.

In support of this application, we submit herewith the documents listed in the accompanying checklist.
We certify the correctness of all the information indicated in such documents to the best of our
knowledge and belief.

We hereby authorize the Bank of Tanzania and any of its authorized agents or staff members to make
an enquiry or obtain any information from any source for the purpose of determining the correctness
of all the representations made in connection with this application or of assessing its merits.

To facilitate communication between us and the Bank, we have authorized ………………. of the
following address:
(1) P.O Box ……….............
(2) Telephone number……
(3) Email address………....
(4) Fax number ……….......

to represent all of us in regard to this application. It is understood that any notice to him shall
constitute sufficient notice to all of us.

Enclosed is a cheque for Tanzanian Shillings five million being payment of our application fee.

Yours faithfully,

____________________ _________________________
____________________ _________________________

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 Banking and Financial Institutions (Mortgage Refinance Companies)
GN NO. 559 (Contd.)
____________________ _________________________
____________________ _________________________
____________________ _________________________
____________________ _________________________
____________________ _________________________

______________

SECOND SCHEDULE
______________
(Made under Regulation 6)
______________

Checklist of Documents

1. Letter of application in the prescribed form.

2. Authenticated legal documents or board resolution authorizing the signatory.
3. Banker’s cheque or any other document acceptable to the Bank evidencing
payment of a non-refundable application fee of five million shillings or any other
amount as may be determined by the Bank.
4. Proposed Memorandum and Articles of Association (unregistered).
5. Proof of source and availability of funds for investment as capital of the
proposed mortgage re-financing company.
6. List of subscribers and proposed members of board of directors and Chief
Executive Officer.
7. Proof of citizenship of every subscriber and every proposed directors and
senior management officers. This includes detailed curriculum vitae, photocopy of
the pages of the passport which contain personal information and two recent
passport size photographs.
8. Audited balance sheet, income statement and cash flow for the last three
years, of every subscriber who owns five per cent or more of the share capital of
the proposed mortgage re-finance company engaged in business.
9. Credit reference reports for every significant subscriber and every proposed
director and senior management officer.
10. Certified copies of annual returns of every subscriber who owns five per cent or
more of the share capital of the proposed institution and every proposed member of
the board of directors and Chief Executive Officer together with accompanying
schedules or financial statements filed during the last three years with relevant
Authority.
11. Certified copies of tax returns of every subscriber who owns five per cent or more
of the share capital of the proposed institution and every proposed member of the
board of directors and Chief Executive Officer together with accompanying
schedules or financial statements filed during the last three years with relevant Tax

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 Banking and Financial Institutions (Mortgage Refinance Companies)
GN NO. 559 (Contd.)
authorities together with respective Tax clearance certificates.
12. Statements from two persons who are not relatives vouching for the good moral
character and financial responsibility of the subscribers who own five per cent or
more of the share capital of the proposed institution and the proposed directors and
senior management.
13. Home country regulator certification if the applicant is a foreign mortgage re-
finance company.
14. Declaration that the funds to be invested have not been obtained criminally or
associated with any criminal activity.
15. Business plan for the first four years of operations including strategies for growth,
dividend payout policy, career development programme for the staff and budget for
the first year.
16. Projected balance sheets, income statements and cash flow statements for the first
four years of operation.
17. Brief description of economic benefits to be derived by Tanzania and the
community from the proposed mortgage re-financing company

__________________

THIRD SCHEDULE
__________________
(Made under Regulation 10)
__________________

CRITERIA FOR DETERMINING THE CHARACTER AND EXPERIENCE

REQUIRED FOR A MEMBER OF THE BOARD OF DIRECTORS AND SENIOR
MANAGEMENT OF AN MRC

1. In order to determine, for the purpose of these Regulations, the character

and moral suitability of persons proposed to be members of the Board or senior
management, the Bank shall have regard to the following qualities, in so far as they are
reasonably determinable, of the person concerned-
(a) adequate education background;
(b) general character;
(c) professional skills, competence and soundness of judgment for the
fulfilment of the responsibilities of the office in question; and
(d) the diligence with which the person concerned is likely to fulfil those
responsibilities.
2. For the purpose of and without prejudice to the generality of the provisions
of paragraph (1), the Bank may have regard to the previous conduct and activities of the
person concerned in the business or financial matters and, in particular to evidence that

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 Banking and Financial Institutions (Mortgage Refinance Companies)
GN NO. 559 (Contd.)
such person-
(a) has committed any act of bankruptcy;
(b) was a director or in a senior management position of a bank or financial
institution that has been liquidated or is under liquidation or statutory
management;
(c) has committed or been convicted of the offence of fraud or any other
offence of which dishonesty is an element;
(d) has contravened the provision of any law designated for the protection of
members of the public against financial loss due to the dishonesty or
incompetence of, or malpractices by, persons engaged in the provision of
banking, insurance, investment or other financial services.
3. Any other criteria, which the Bank may prescribe, from time to time.
4. The following documents shall be submitted to the Bank with respect to
each proposed director and senior management team, together with other documents the
Bank may require-
(a) detailed curriculum vitae;
(b) certified copies of academic and professional certificates;
(c) photocopy of the pages of the passport which contain personal
information including photograph, nationality, date and place of birth
and issuer of the passport;
(d) two certified passport size photographs; and
(e) references from two persons who are not relatives, vouching for good
moral character, integrity and performance.

Dar es Salaam FLORENS D.A.M. LUOGA

…………………., 2022 Governor

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