Letshego takes Sh5.4bn IFC loan to boost housing

Pan African microlender Letshego has obtained a Sh5.49 billion ($50 million) loan from the International Finance Corporation (IFC) to boost affordable housing lending in Namibia with the potential to expand the partnership to other countries including Kenya.

The IFC— the World Bank's private lending arm— said it is committed to working with partners across Africa to help increase access to affordable housing, including supporting the development of sustainable and responsible mortgage markets.

Letshego’s new loan will help it finance up to 4,000 home developers in Namibia, the firm said in a statement.

The firm, which is listed on the Botswana stock exchange, provides unsecured consumer loans and besides Kenya has operations in 11 countries including Mozambique, Namibia, Swaziland, Tanzania, Uganda and Zambia.

Access to affordable housing has been a problem in many African countries, with private developers largely concentrating on the higher end of the market leading to an oversupply in that segment even as countries continue to suffer a housing deficit.

“Letshego works with a number of partners to deliver productive lending solutions, like affordable housing, across our footprint in Africa. We have launched affordable housing in four out of our 11 markets so far – Kenya, Uganda, Tanzania and Namibia,” said Adam Kasaine, the chief executive officer of Letshego Kenya Limited.

“Currently in Kenya, the housing deficit is sitting at 80 percent. With our affordable housing solution, Letshego aims to bring more homes to more Kenyans.”

In Kenya, the government has set an ambitious target of developing 500,000 new affordable houses by the end of next year, largely through partnerships with the private sector.

The firm is the latest among regional financial institutions to raise billions of shillings from international financiers to fund their expansion and ride out the increased economic risks brought by the Covid-19 pandemic.