African Union for Housing Finance Conference: A new landscape of housing finance investors 09/12/2013, by Ashraf Esmael- CEO Bramer Bank, Mauritius.

1. Mobilising Capital for Housing Finance
ASHRAF ESMAEL
CHIEF EXECUTIVE OFFICER
Bramer Bank - Sep 2013

2. 2
Landscape of Housing Finance in Africa
 Urbanisation of African economies
 Africa’s Middle class needs housing
 Opportunities in Property Markets
 Affordability – a Key Challenge
 Lack of long term finance
 Housing supply constrained
 Rising costs of building materials
 Integrated Approach
 Housing Microfinance

3. 3
Fast urbanization of Africa

4. 4
Urbanisation drives demand for Housing
Africa is almost as urbanized as China and has as many
cities of 1 million people as Europe.
As a result 60% of Africa’s urban population lives in
inadequate housing.
46 African cities are now larger than one million people
2% lived in Cities in 1900 2.0millpp
35% lived in cities in 2007 0.4bill pp
65% will live in cities in 2050 1.4bill pp
Every day for the coming fifteen years, Africa’s cities will
have to accommodate an extra 40,000 people
• => 20 million new urban households 2007 - 2050
•
•
•
•
•

5. 5
Huge Demand Gap of 10 to 1
Africa is plagued with a chronic inability to meet the widening
gap between housing demand and supply for low income
groups. The gap is approaching 10 to 1.
Region
Demand
Supply
Sub- Saharan
Africa
• 32 million households in Sub-Saharan Africa are
considered inadequate.
• Under current urbanisation rates , an additional 14
million housing units per annum are required
• 308 million people; 191 million of which
live in inadequate housing.
Kenya
• 60% of households are considered ‘inadequate’
housing and are located in slums.
• 150,000 units are required per year
• Less than 30 000 units per year
• The annual deficit is thus more than
120,000 housing units per year
Ghana
• Ghana’s annual demand for housing currently
stands at 120,000 housing units per annum
• Current housing supply provides 42,000
units per annum which is only 35% of the
demand
Nigeria
• 33.6 million Nigerians living in urban areas (46% of
• The annual deficit is 16 million units
the urban population) are considered to be living in • 720,000 units need to be created
annually to meet the demand
inadequate housing
• Current supply is however meeting only
3% of this demand
Tanzania
• 80% of the entire population is living in unplanned, • The housing deficit in urban areas is
informal settlements with poor shelter and few
estimated at 1.2 million units.
basic services

6. 6
Mortgage Finance Penetration still low in
most parts of Africa
Mortgages as a percent of GDP
26.4
19.6
20
18
16.9
16
14
12
12
10
8
6
3.94
4
2
0.07
0
0.07
0.16
0.21
0.39
0.5
0.5
0.5
1
1.1
1.2
1.3
1.6
2.3
2.3
2.51
12.2

7. 7
3% of African population have income
viable for a mortgage
According to the World Bank,
18.8% of Africa’s population earn below $20 per day.
3% of the population have
income viable for a mortgage
24% of Africa's
10.8% of Africa's population earn between $10 – $20
per day.
9.9% of Africa's population earn between $4 – $10 per
day.
Opportunity for housing micro finance and incremental
housing delivery.
population earn
between $2 –$4 per day
< $2,00/day
36.5% of Africa's
population earn below
US$ 2 per day
According to the UN Habitat (2010) about 40.32% of
Africa's population live in slums.
Source: AfDB (2011)

8. 8
Access to Financial Services limited in
Africa
Financial service access and usage in Selected African countries
Access to Finance by Households
Source, IMF, 2011

9. MAURITIUS
9
Mauritius : a different story
In 2012, the price of a newly built house is between US$39 750
and US$49 650.
88.9% of Mauritians own their home.
<$2,00/day
A small percent of the population cannot access MHC and NDHC
loans, event hough they are employed.
The minimum loan for a mortgage was lowered to US$451.46
making access to finance for almost all Mauritians.
4.8 percent of the population live in iron/tin walled houses.
International poverty line; less than 2 percent of the country's
population live below US$60 per month.

10. 10
Informal Sector is 80% of home buyers
Affordable housing is a $30 billion market in Africa. The size of
the market commands a huge potential for innovative housing
finance players.
Innovations and financial deepening in different
areas of housing finance
•
•
•
•
Development & Construction finance
Finance for Rental housing
Mortgage finance
Non-collateralized credit /Micro finance

11. 11
Integrated Approach for Capacity
Enhancement
Real Estate Equity
Partnerships
Construction Financing
Rental Housing
Finance
Mortgage Finance
Non Collateralised
Credit for Housing

12. 12
Microfinance – Tackling Affordability?
Data from African MFIs reporting to the MIX Market in 2011

13. 13
Thank You
Bramer Bank – Sep 2013