Kenya: Shelter Afrique Calls the Government to Establish a Micro-finance for Hou...
Kenya, July, 16 2019 -
Shelter Afrique, a pan-African financier in housing and real estate has urged the government to establish a housing microfinance fund to improve access to housing finance by those in the lower end of the market.
Shelter Afrique’s chief executive Andrew Chimphondah said most policies had an exclusive urban focus, non-consideration of the low-income groups and the rural areas.
He said the establishment of such a fund would make it easier facilitate inclusive housing market systems and make affordable housing a reality in the country.
“Access to adequate housing for low-income earners is a critical development issue globally and more so for Africa. Currently, 90 per cent of Africans cannot afford to buy a house or qualify for a mortgage,” Chimphondah said during the Affordable Housing Investment Summit in Nairobi.
He added that majority of African countries were facing housing crisis and that the continent housing industry required at least minimum of Sh250 billion ($2.5bn) in new investment annually for a meaningful impact.
However, he noted that the sub-Saharan Africa had a limited access to long-term financing for housing, which is almost invariably limited to commercial banks offering formal, multi-year mortgages.
According to World Bank, only 2.4 per cent of the Kenyan population is able to afford typical loan rates.
At the end of December 2018, there were only about 26,000 active conventional mortgages in the whole country - the majority of which were granted to urban professionals.
“There is need for alternative housing finance products such as medium-term non-mortgage finance instruments, mini-mortgages, and micro-finance for housing,” Chimphondah said.