The World Bank has approved a $40 million loan for Tanzania to help set up a housing finance project in east Africa's second largest economy. "By strengthening access to housing finance, this loan will promote equitable economic growth, which in turn creates jobs and reduces poverty," John Murray McIntire, World Bank Country Director for Tanzania, Uganda, and Burundi, said in a statement.

Tanzania, like many African countries, suffers from a severe shortage of good quality housing, said the World Bank.

"The shortage is growing every year, compounded by lack of long-term housing finance, lack of a formal residential housing construction sector, difficulties with land rights and rapid population growth and urbanisation," it said in its statement.

The project aims to provide medium and long-term finance to mortgage lenders.

This is the third credit that the World Bank has approved for Tanzania in the 2009/10 fiscal year, bring the total funds under International Development Association to $250 million.

News source: Reuters - Africa