The Commercial Bank of Africa has granted a Sh1.75 billion ($20 million) facility to Shelter Afrique for the provision of affordable housing in selected member countries within Africa.
The loan is part of $60 million to be raised through a syndicated loan facility to enable the pan-African finance institution to deliver on its mandate of development of housing and real estate.
In East Africa and in Kenya specifically, the property market is responding to demand that has been created by an expanding middle class who has the disposable income and ability to service their mortgages. However, affordable housing for a majority of Kenya’s population remains a challenge.
“Kenya has a dynamic mortgage industry which is growing rapidly and becoming increasingly competitive. Nevertheless, mortgage lending is still accessible to only a minority of the population and this partnership between CBA and Shelter Afrique will play a key role in alleviating some of the structural financing inefficiencies encumbering Africa’s real estate growth,” said CBA Group Managing Director Mr Isaac Awuondo.
Shelter Afrique’s Managing Director Mr Allasane Ba said there is need for increased collaborative partnerships to propel the real estate sector by providing affordable housing solutions.
“Most of the population cannot afford housing built by formal developers and as a result address their housing needs independently and often informally,” he regretted.
With Kenya‘s urban population growing at a rate of 4.2 per cent a year this is putting pressure on major cities to provide housing for this growth. This shortage of supply has been a major contributing factor to the rise in property prices, although more recently an unbalanced supply across market segments has been observed, with available supply to the upper middle income and high end market, but insufficient supply to the low and lower middle income segments.
CBA and other financial institutions backing Shelter Afrique’s housing projects will spur the development of affordable housing and make the hope for decent housing for all Kenyans a reality, said Mr Owuondo.
Shelter Afrique is the only pan-African finance institution that exclusively supports the development of the housing and real estate sector in Africa. A partnership of 44 African Governments, the African Development Bank and the Africa Reinsurance Company, Shelter Afrique builds strategic partnerships and offers a host of products and related services to support the efficient delivery of affordable housing and commercial real estate.