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Study tips micro-loans to bridge housing shortfall among poor

A National Housing Corporation estate project in Changamwe. PHOTO | WACHIRA MWANGI
A National Housing Corporation estate project in Changamwe. PHOTO | WACHIRA MWANGI 

Housing microfinance and small non-mortgage-backed short-term loans can bridge the financial gap faced in addressing growing housing needs in the region, a new study by Habitat and Mastercard Foundation shows.

The findings in the report Building the Business Case for Housing Microfinance in sub-Saharan Africa shows that there is a demand for housing microfinance among families or individuals earning as little as Sh500 a day who are seeking to build, extend, or renovate their home.

“The business case study argues that housing microfinance, small non-mortgage backed loans for short terms, can become a mainstream offering in the market to address growing housing needs in the region, incremental building patterns, and the land tenure realities of low-income households,” reads part of the report.

The study builds on an earlier report  of a survey carried out over six years in Kenya and Uganda called Building Assets Unlocking Access.

The study has so far reached more than 47,000 households and mobilised more than Sh4.3 billion in capital to benefit over 237,000 individuals.

The study was conducted by Habitat’s Terwilliger Centre for Innovation in Shelter and the Mastercard Foundation.

“Solving the housing challenges in Africa will require a massive amount of capital investment and most of that will need to come from the private sector,” said vice president of Habitat’s Terwilliger Centre for Innovation in Shelter, Patrick Kelley. 

“Financial institutions of all kinds have a role to play, especially those already deeply embedded in communities and who understand people with informal sector livelihoods.”

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