In the field of financial business, refinancing is not a new terminology. In the common sense, the word refinancing means replacing your existing mortgage with a new mortgage that has more favorable terms.
In banking business, 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. This business involves the Mortgage Refinance Company (MRC) which refinance the mortgage loans of banks or financial institution with recourse to the banks/financial institution.
No person can involve in the mortgage refinancing business without being licensed by the Bank of Tanzania. The Banking and Financial Institutions (Mortgage Refinance Companies) Regulations, 2022 have established a procedures and requirement for obtaining a license for refinancing the mortgage loans of banks or financial institution.
All license applications for mortgage re-financing business are to made to the Bank in a prescribed form. The applicant must pay a 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. However, before filing an application for license, a person must apply for a pre-filing meeting with the Bank.
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