Scoping the Demand for Housing Microfinance in Africa: Status, Opportunities and Challenges

Abstract

Housing microfinance (HMF) is not a new trend in Africa. Historically, it has been known that shelter needs in the continent are largely met when households seek out their own savings and other informal funding sources to finance and build their homes incrementally. A new dimension was recently added to this process of self-build when microfinance lending grew in the continent. Households quickly discovered the potential of this source of funding, and microfinance loans for small business and other uses became diverted for housing purposes. The advantage of HMF is that it is a response to the poor’s actual housing finance needs. This research shows that there is enormous potential for dedicated HMF lending to contribute towards the alleviation of the shortage of end user housing finance in the continent. It emphasises that there is a need for concerted action among players in the housing development sector to increase the level of HMF lending in the continent.