Deal to mobilize capital for affordable housing in Africa

Shelter Afrique, a pan-African financing organization, signed a memorandum of understanding on Tuesday with Terwilliger Centre for Innovation in Shelter, the financial inclusion arm of Habitat for Humanity International, to jointly mobilize capital for affordable housing.

The funds would be extended to institutions focusing on provision of housing loans to low – middle income population in Kenya and 43 other countries where Shelter Afrique has presence.

The collaboration was formalized in Nairobi by Shelter Afrique's CEO Andrew Chimphondah and Habitat for Humanity's Associate Director for Capital Markets and Financial Inclusion Elena Milanovska.

The partnership will mainly focus on the establishment of an incremental building fund for Africa, capacity building in housing microfinance, and technical assistance.

The move comes at a time when the continent continues to grapple with challenges that has seen demand for affordable housing outstrip supply.

This has been underpinned by high population growth and increased urbanization while supply has been inhibited by lack of affordable housing finance and high cost of land among other challenges.

According to Shelter Afrique, Uganda is facing an annual deficit of 1.6 million housing units, Kenya 2 million housing units, Tanzania 3 million South Africa 3 million and Nigeria 17 million housing units.

Chimphondah said the partnership now makes it easier for the two institutions to jointly facilitate efficient and inclusive housing market systems with the main objective of making affordable housing a reality across Africa, more so within the lower end of the housing market.

The chief executive said innovative ways of financing are needed to boost supply.

"Our research on housing finance options for Africa has shown that the penetration of housing mortgage throughout Africa is quite low -- meaning that the mortgage might not be the right option for low-middle income population."

"We want to give Kenyans and other people in our other 43 member states the opportunity to have a dignified living and we believe this fund will make it easy for such people to access financing to build decent houses in their own area," Chimphondah added.

Milanovska said her organization had established a $100 million micro-build fund that supplies debt capital and technical expertise to help microfinance institutions increase the availability of housing loan products for their low-income customers.

She noted that Habitat for Humanity International had invested more than $4 million in Africa from the micro-build fund, adding that the partnership with Shelter Afrique will make it easy for the organization to significantly increase its investment in Africa.

Habitat for Humanity International has operations in 12 countries in Africa, namely Kenya, Uganda, Tanzania, Rwanda, Ethiopia, Egypt, Cote d' Ivore, Malawi, Ghana, Zambia, Lesotho and South Africa. Shelter Afrique has presence in 44 countries across Africa.

Lucymorangi@chinadaily.com.cn