The Republic of Mali is one of the largest countries in West Africa covering 1 248 574 km2. Mali’s total population was estimated at 18 million, growing at an annual rate of three percent. This is projected to double by 2030, while the urban population will triple from the current level of 40.7 percent. The cheapest housing unit built by a developer in 2017 costs (land cost included) CFA Francs 13 577 850 or US$24 643 this is 29 times the average per capita income.
Housing delivery in Mali is coordinated through the Office Malien de L’habitat (OMH) who facilitate various public-private partnerships with major companies in the housing construction sub-sector. The presidential housing delivery programme has promised to deliver 50 000 affordable housing units by the end of 2018. This has resulted in a major increase in budgetary allocation to the OMH from about CFA Francs 23 billion (US$41.74 million) to CFA Francs 73 billion (US$132.49 million) in 2017.
The development of a cadastre and improvements to the titling process has positively impacted on the property market. In 2017, The World Bank’s ‘registering property’ indicator in it’s Doing Business Report, ranked Mali135th out of 189 countries in 2017, four places up compared to 2016.
- Access to Finance
- Housing Affordability
- Housing Supply
- Property Markets
- Housing Policy and Regulations
- Housing Sector Opportunities
Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2017 edition, which has up-to-date profiles for 54 African countries.Download yearbook
The Republic of Mali is one of the largest countries in West Africa covering 1 248 574 km2. Mali’s total population was estimated at 18 million, growing at an annual rate of three percent. This is projected to double by 2030, while the urban population will triple from the current level of 40.7 percent.
Mali is one of the poorest countries in the world. According to the UNDP’s Human Development Index, it ranked 175th of 188 countries in 2016. However, life expectancy at birth is estimated at 65 years, one of the highest in Africa. Gross national income (Atlas method) was US$750 per capita in 2016, again among the lowest in the world. In 2014, 46.9 percent of Malians were living below the national poverty line.
With the July 2013 presidential election, the political situation took a strong path to stabilisation, which was strengthened with the signing of peace agreements with rebel groups in May and June 2015. However, challenges remain on the way to full peace all over the country, as sporadic outbreak of violence due to rebel or jihadist attacks were recently noted in several parts of the country. GDP growth remained strong over the past five years, with the highest growth recorded in 2014 at seven percent, before dropping to 6.0 percent in 2015 and 5.4 percent in 2016. GDP growth in Mali is driven by gold exports and the primary sector (thanks to good harvests). Inflation remained under control at around 0.3 percent in 2016 and around 0.9 percent in 2017. The October 2015 Mali Economic Recovery and Development Conference held in Paris yielded Euros 3.2 billion from the donors to support the country over the period 2015-2017.
During his presidential campaigns, President Ibrahim Boubacar Keita committed to providing affordable housing. This was restated by Prime Minister Moussa Mara when he took office, promising that the Government will provide 50 000 housing units by 2018, through the Presidential Housing Programme. The Government is still committed to this promise with more than 8 000 housing units delivered in only two years in office, while prospects are good for achieving the goal of the 50 000 units. An important development in the housing finance sector in 2016 was the absorption of the Banque de l’Habitat du Mali (BHM), the Mali Housing Bank by the Banque Malienne de Solidarité (BMS) in May 2016, following recommendations from Mali’s development partners to dismantle because of poor performance.
Mali significantly improved its ranking on the “Starting a Business” indicator of the 2017 Doing Business Report from 172nd in 2016 to 108th in 2017.
Access to Finance
In 2017, the financial sector consisted of 13 banks (of which a bank branch)[i], three financial institutions (the Fonds de Garantie pour le Secteur Privé which received approval from the Government to operate as a financial intermediary in 2015), two pension funds – a social security fund for private sector employees (the National Institute of Social Welfare, or INPS) and a pension fund for public sector employees (the Retirement Fund of Mali, or CRM) – and six insurance companies. The banking financial sector is dominated by commercial banks. Other financial institutions include the Mali Branch of Alios Finance (a Cote d’Ivoire-based private financial group) and the Mali Mortgage Guarantee Fund (Fonds de Garantie Hypothecaire du Mali, or FGHM). Five banks in Mali formally offer housing loans. Some commercial banks also offer up to CFA Francs 30 million or US$50 365 for equipment loans for housing enhancement, acquisition or construction of housing for individuals at as high as 12 percent interest rate over five years. Many of these banks (such as Ecobank Mali and Coris Bank International Mali) are also very active in supporting housing projects through partnerships with either developers or housing cooperatives.
Despite the number of financial institutions, access to finance as measured by credit-to-GDP ratio was estimated at only 27.8 percent in 2015, according to the Central Bank (Banque Centrale des Etats de l’Afrique de l’Ouest – BCEAO) statistics. In 2015 there were 533 bank branches, 405 ATM machines and 1 310 529 bank accounts for the whole population, most of which were concentrated in urban areas[ii]. At December 2016, a total of CFA Francs 2 101 billion (US$ 3.81 billion) of loans were emitted, a 21 percent increase from the 2015 level. However, only 36 percent of these loans were medium to long-term[iii]. The non-performing loans ratio stood at 5.3 percent in 2015, a slight decrease from its 2014 level[iv].
General lending rates decreased significantly over the past years, and are between eight and nine percent on average for long-term loans (mortgages), above the West African Economic and Monetary Union (WAEMU) average of 7.7 percent in 2013[v]. Interest rates on deposits have remained almost constant at around 3.5 percent.
In 2015, following an assessment of the financial sector in Mali, the dismantlement of the Mali Housing Bank was recommended, and led to its absorption by the Banque Malienne de Solidarité (BMS) in May 2016. Indeed, the fiscal sustainability of BHM which was subsidized by the Government of Mali as one of its main housing policy instruments was seriously questioned. It is also important to mention that despite the creation of the Caisse Regionale de Refinancement Hypothecaire (CRRH), a regional mortgage refinancing facility, Malian banks are among those which take less advantage of it; Mali being the country with the lowest affiliated banks to the CRRH. However, housing finance continued to grow, with the Mali branch of Bank of Africa launching a new product to fund housing projects of its clients in 2016. It is a mortgage product named “Prêt ma maison” offered over a period of 15 years at moderated interest rate. The amount of the mortgage depends on the applicant’s revenue and the interest rate is negotiable. No down-payment is required from the applicant to obtain the loan, but standard guarantee conditions (secured job or a stable source of revenue for example) apply. The BMCE Group of which Bank of Africa is part of, offers similar products in other countries such as Benin and Togo. Since this product is new, it is difficult at this point to measure take-up.
Several other banks support the housing finance sector, through public private partnerships. This is the case for example with Coris Bank International, which supported a 3 100 housing units development in N’Tabacoro for a total of more than CFA francs 25 billion (US$ 45.37 million).
The microfinance sector has soared in Mali since the end of the 1990s. According to the Central Bank of West African States (BCEAO), 105 microfinance institutions (networks) were listed in Mali at the end of March 2017 (excluding affiliated members of networks. On a sample of 17 microfinance institutions representing about 90 percent of the sector, there was a total of 449 service points for a total of CFA francs 88.4 billion (US$ 160.44 million) outstanding credits and CFA francs 72.4 billion (US$ 131.40 million) in deposits for a total of 1.035 million clients[vi].
Housing microfinance is very limited in Mali, with only one microfinance network, Nyesigiso, offers housing microfinance. Nyesigiso, in partnership with FGHM, provides mortgage loans for the acquisition of housing units on serviced sites (the maximum amount of these mortgages is CFA Francs 20 million, or US$ 36 298, over up to 15 years) and construction loans for financing the construction of new housing units, for up to CFA Francs three million (US$ 5 445), payable over a maximum of 36 months[vii].
The FGHM, created in 2000 to cover losses incurred by financial institutions in the case of default by mortgagees, and to sustain home ownership for households remains one of the strongest pillars of the Mali housing policy. FGHM offers two products: mortgage guarantee and social housing guarantee. This was a unique housing finance product in the WAEMU region until recently (Cote-d’Ivoire launched the same type of financial institution in 2014), as it allows the institution to meet the dual demand of covering the risks of default and enhancing the quality of the portfolio.
While land and housing is not expensive by international standards, very low incomes mean that formal housing is still unaffordable to a large proportion of the population. According to OMH data, the cheapest housing unit built by a developer in 2016 costs (land cost included) CFA Francs 13 577 850 or US$ 24 643. This house was built on a 200m2 plot, over 59.62 m2. This means that it cost on average US$413.33 per square meter to build such a house. Prices in the capital city of Bamako are higher. However, in the provision of serviced plots, the focus is on plots costing between CFA Francs 1.5 million and CFA Francs 2 million (between US$ 2 722 and US$ 3 630) in cities, all over the country. A standard galvanised iron sheet, often used in self-build initiatives, costs between CFA Francs 3 000 (US$ 5.44) for a 4kg sheet and CFA Francs 6 000 (US$ 10.88) for a 7kg sheet. The minimum acceptable size land plot is around 160m².
Cement price continues to drop since the completion of several cements plants across the country (the Dio plant, the Diamou plant, the Astro plant, and the Diamond plant). Only five years back, the ton of cement was sold at around CFA Francs 120 000 (US$ 217.79) or CFA Francs 6 000 (US$ 10.89) the bag of 50kg. Today, the same 50kg bag of cement costs CFA francs 4 375 or US$ 7.94. This follow the general trend in cement price in West Africa, with an increase interest of major investors in the region such as WACEM, Dangote, Lafarge and Heidelberg Cement.
The average annual income as estimated by the per capita gross national income (Atlas Method) was at US$760 in 2016. The price of the cheapest housing unit, as mentioned earlier, is therefore about 29 times the annual per capita income. This justifies the government’s emphasis on affordable housing and subsidy programmes to support people to acquire housing.
A recent World Bank study estimated the need for housing in Mali at about 82 500 units per year, 51 100 in urban areas, and 31 400 in rural areas. Malian authorities at the highest level have made the provision of affordable housing a top priority of their political and social agenda. In line with similar initiatives by his predecessors, the sitting President of Mali launched in 2013 an important housing programme, with the goal of delivering 50 000 affordable housing units by the end of his term in 2018. The Government’s strategy to achieve this goal is based on public private partnerships with major companies in the housing construction sub-sector. Several partnerships have been concluded with, among other important actors: the Association des Promoteurs Immobiliers du Mali (APIM – Malian Association of Real Estate Developers), the Association Professionnelle des Banques et Etablissements Financiers du Mali (APBEF), the Chinese company CMEC, Palmer Energy and Construction Corporation, a US-based company. The latter signed in 2014 a contract with the Government of Mali (through the Ministry of Housing and Urban Development) for the delivery of 4 000 social housing units within four years (the works started in October 2015), and an agreement to deliver another 10 000 units which started in the first quarter of 2016. CMEC signed an agreement for the delivery of 24 000 housing units Several local banks, including Coris Bank International, Ecobank-Mali, Banque Malienne de Solidarité (BMS) and Banque Internationale pour le Mali (BIM-SA) partnered with real estate developers to support the Government programme. All this is spearheaded by the Office Malien de l’Habitat (OMH), one of the major players in the public sector. Among other things, OMH (i) administers the Government’s subsidy program in partnership with the FGHM, (ii) negotiates and signs public private partnerships with potential investors, (iii) manages the acquisition and sales of newly built housing units; (iv) ensures that Government lands are serviced to host housing development projects; (v) administers the allocation of housing to potential beneficiaries so as to ensure transparency and fairness. The Government increased the OHM budget by more than 200 percent between 2016 and 2017 to support the supply of housing.
The major developments on the supply side over the past year include the completion of an additional 3 000 housing units announced by the Ministry of Housing and Urban Development in 2016, ready to be sold. As the end of the president’s term approaches, the Government of Mali is taking aggressive measures to meet its target for the Presidential Housing Programme, which is to complete 50 000 housing units. Thus, the OMH budget more than doubled for year 2017 jumping from about CFA Francs 23 billion (US$ 41.74 million) to CFA Francs 73 billion (US$ 132.49 million) with the clear goal of getting as close as possible to the 50 000 housing units’ target.
Despite tremendous efforts by the government to provide housing to its population, self-construction remains the main means of housing supply. A 2011 Shelter Afrique study on the real estate sector in Mali estimated that almost 75 percent of the housing supply in the country constituted self-constructed units. Self-construction involves two approaches: simple self-construction and assisted self-construction, the latter involving direct technical assistance from the Malian Housing Office, available only to housing cooperatives.
Other investors funding the housing sector in Mali include the Islamic Development Bank (IDB). This institution signed in 2012 financing contracts with the government for the supply of 1 000 housing units in Bamako. The project costed CFA Francs 14.8 billion, half of which were provided by the IDB. The 1 000 units were completed by July 2015 and sold out to beneficiaries.
In Mali, most land is owned by the government (mainly central); however many individuals claim ownership without proper land titles. To secure the property market, the government is progressively putting in place a national cadastre, focusing first on urban areas and regional capitals. In October 2014, a group of donors led by the French committed to support Mali in this ambition, at the occasion of a round-table on land management reforms in Mali. Following this, a Permanent Secretariat for Domain and Land Reform was set up with a five-year mandate to prepare and conduct the reform. Financial resources in the amount of CFA Francs 30 billion (US$54.45 million) were provisioned for the Secretariat while technical assistance will be provided by the French. The first phase of the project covers Bamako (245 km2) and the Kati Circle (16 897 km2).
Despite the above-mentioned challenges, property markets function somehow in Mali, with the OMH, the Banque de l’Habitat du Mali (BHM, until 2015) and a few small private real estate developers as main actors. Developers agree to sell all completed housing units to the OMH, which in turn sells them out to households under leasing or direct purchase contracts. BHM and a few other commercial banks, as well as the microfinance network Nyesigiso provide housing loans or mortgages up to CFA Francs 20 million over a 20 year term at an average interest rate of about 10 percent a year. The loans are then guaranteed by the Malian Mortgage Guarantee Fund (FMGH). A down-payment of 30 percent of the purchase price is required by the BHM, which then finances the remaining 70 percent with a mortgage.
Difficulties remain that hinder the efficient functioning of Mali’s property markets, despite significant efforts by the government. According to the World Bank’s 2017 Doing Business Report, access to construction permits involves 10 procedures, takes 124 days and costs 372.2 percent of the per capita income. This places Mali in 142nd place out of 189 countries, four places up from its 2016 Report ranking. This was due to the reduction of the time needed to obtain a geotechnical study. On the ‘registering property’ indicator, Mali ranked 135th out of 189 countries in 2017, four places up compared to 2016. Indeed, it takes five procedures and 29 days, and costs 11.8 percent of the property value to register a property. Also, the quality of land administration index remains low at eight on a 0-30 scale, despite the significant land administration reform launched since 2016, and which led to the creation of a separate Directorate for Public Land Administration and a Directorate for the National Cadaster. This resulted in the dematerialisation of about 34 000 deeds titles in 2017 and 108 000 in 2016 into a new land management information system (Modonum).
To face the demand for housing, especially in urban areas, a rental market is developing around big agglomerations such as Bamako (where 37 percent of households are renters) and other secondary cities where the housing demand is high. It is estimated that 34[i] percent of urban dwellers rent their housing units. Aggressive housing policy implementation has slowed down the development of informal settlements, which was as high as 65 percent in 2002.
It is also worth noting that a few websites developed by very small real estate operators often advertise and try to maintain up to date opportunities for selling or buying properties, mostly around Bamako and other urban centers. Prices range from a couple of million CFA francs to several tens of millions CFA francs, obviously, for middle and high income classes.
Housing Policy and Regulations
Mali adopted its National Housing Strategy in 1995, and this continues to be the main framework under which all housing interventions are pursued. The goal of this strategy is to improve living conditions throughout the country by promoting access to decent housing for people with low and intermediate incomes. In line with this, the government created a number of institutions to facilitate access to housing, such as the Office Malien de l’Habitat (OMH), the Mali Housing Agency created in 1996. The agency is the main facilitator of relationships between different actors in the sector, and is active in supplying serviced land for housing, promoting the use of local building materials, participating in financial operations (which includes having a shareholding in the BHM and the FGHM) and subsidising the interest rate on loans for eligible mortgage applicants, mostly members of housing co-operatives.
Members of housing co-operatives benefit from a subsidised interest rate ranging from seven to 11 percent depending on the monthly income of the eligible applicant. Besides this, individual housing co-operative members with monthly incomes lower than CFA Francs 75 000 (US$ 136.12) and CFA Francs 100 000 (US$ 181.49) benefit from an extra subsidy comprising a three point and two point reduction, respectively, on their mortgage interest rates for the first five years of the mortgage. The Malian government’s housing subsidy programme is implemented through the OMH.
The Banque de l’Habitat du Mali (BHM), the Mali housing bank was created as a specialised institution dedicated to offering housing finance services. However, it has shown some structural weaknesses, with non-performing loan rates as high as 76 percent. This pushed the Government to come to its rescue over several years, thus increasing its share in the bank. Financial assessment by the donors recommended the privatisation of the BMH, which finally took place in May 2016, with the absorption by the Banque Malienne de Solidarité (BMS). The government has also taken a number of other measures to facilitate housing supply. The regulatory framework for the housing sector in Mali is one of the most comprehensive in the WAEMU, including a law on condominiums, a law governing property development and a law on housing finance. These measures have increased the number of local real estate developers operating in the housing market and the number of housing co-operatives.
In June 2015, The Parliament of Mali voted a new law on Credit Reference Bureaus in compliance with the WAEMU directives on the matter. This is a key development for the housing sector as it will enhance the credit environment in Mali.
Housing Sector Opportunities
With that of Senegal and Cote-d’Ivoire, the Malian housing sector is one of the most vibrant of the WAEMU region. Recent available data estimated the housing needs in Mali at about 82 500 units per year, of which 61 100 is for urban areas and 31 400 is for rural areas. This is in line with the Government ambition of providing 50 000 housing units over the period 2013 – 2018. The Government program has raised the interest of several investors in the housing construction sector in Mali. However, there is still a lot of room, at least for the coming years, for newcomers, to meet housing demand in Mali. Housing supply is currently influenced by the Government which is very active in contracting public private partnerships to that end, the goal being the promotion of house ownership, mainly affordable housing, given the low level of income in the country. Experience from the past few years clearly showed that national capacities to meet the needs for housing construction are very limited, which leaves some room for new developers to come in. Opportunities also exist in the rental segment of housing, especially in urban areas where four inhabitants in ten are in demand for rentals.