Mali has a growing housing finance sector. As the mortgage market does not yet meet the breadth of the population who might afford a mortgage, most households still finance their housing independently, with savings or non-mortgage credit.
The lowest recorded interest rate on a mortgage in Mali is 8.75 percent, as of September 2016. The cheapest newly built house by a developer recorded by CAHF is US$ 19 642, which is for a 32 square metre unit. Cement prices are lower than the continental average, at US$ 7.55 for a 50-kilogram bag.
With an urbanisation rate of 4.92 percent, demand for affordable housing will remain strong, both for rental and purchase. Housing microfinance will play an important role in increasing the supply of housing, and efforts to increase access should be undertaken. Several banks offer home loans for up to US$ 50 000, while a national mortgage guarentee fund (Fonds de Garantie Hypothecaire du Mali, should support mortgage market development. With a good macroeconomic environment, sound policy, better data and increased access to affordable credit, an enabled housing market can increasingly provide housing that the average household in Mali can afford.
Find out more information on the housing finance sector of Mali, including key stakeholders, important policies and housing affordability:
- 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 2016 edition, which has up-to-date profiles for 51 African countries.Download yearbook
The Republic of Mali is one of the largest countries in West Africa covering 1 248 574 km2. In 2014, Mali’s population was estimated at 15.8 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 39.1 percent.
Mali is one of the poorest countries in the world. According to the UNDP’s Human Development Index, it ranked 179th of 188 countries in 2015. However, life expectancy at birth is estimated at 65 years, one of the highest in Africa. Gross national income (Atlas method) was US$790 per capita in 2015, 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 increased by about five percent in 2013, and reached 5.8 percent in 2014, driven by gold exports and the primary sector (thanks to good harvests), but slowed down to around 5.2 percent in 2015; while inflation was under control at around 0.3 percent. The slowdown of economic growth was mainly due to poor performance in the agriculture and transformation sectors. Suspension of foreign aid following the 2012 coup was lifted after the elections and Mali was able to secure more support from the donors’ community. 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.
Access to Finance
In 2015, the financial sector consisted of 14 banks (of which a bank branch)[i], including an agricultural bank and a housing bank (the Banque de l’Habitat du Mali, or BHM), three financial institutions (the Fonds de Garantie pour le Secteur Privé received approval from the Government to operate as a financial intermediary), 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). Together the BHM and the FGHM dominate mortgage lending. Several commercial banks offer housing up to CFA Francs 30 million or US$50 365 for equipment loans for housing enhancement, acquisition or construction of housing for individuals at 12 percent interest rate over five years. Many of these banks 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 2014 there were 516 bank branches, 380 ATM machines and 1 236 611 bank accounts for the whole population, most of which were concentrated in urban areas[ii]. In 2015, a total of CFA Francs 1 747 billion of loans were emitted, almost 20 percent up from the 2014 level. However, only 37 percent of these loans were medium to long-term[iii]. The non-performing loans ratio stood at 5.7 percent in 2014[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. Interest rates applied by the BHM range from four to 11 percent on 15-year mortgages (depending on income and whether the applicant is eligible for interest rate subsidies.) Applicants are mostly civil servants or private sector employees with regular and long term contracts who can use their salary as collateral. To be eligible for subsidised interest rates, an individual must be a member of a housing co-operative (cooperatives d’habitat) and have a monthly income of less than CFA Francs 100 000 (US$167.88). The duration of mortgages may also be extended to 20 years for members of housing co-operatives.
The microfinance sector has soared in Mali since the end of the 1990s. According to the Central Bank of West African States (BCEAO), 127 microfinance institutions were listed in Mali at the end of March 2016, with a total of 906 service points. With a total outstanding credit of more than CFA Francs 67.6 billion (about US$113.5 million), the penetration of microfinance services was estimated at more than 50 percent of the population. The total outstanding credit reached CFA Francs 77 billion (or about US$129.3 million). At end March 2015, the total number of microfinance clients was about two million[vi].
Only one microfinance network, Nyesigiso, offers housing microfinance in Mali. 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$33 577, over up to 15 years) and construction loans for financing the construction of new housing units, for up to CFA Francs three million (US$5 037), payable over a maximum of 36 months[vii].
The FGHM was created in 2000 to cover losses incurred by financial institutions in the case of default by mortgagees, and to sustain home ownership for households. 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.
The landscape of housing finance in Mali was enhanced in 2010 by the creation and full operation of the WAEMU Regional Mortgage Refinance Bank (Caisse Régionale de Refinancement Hypothécaire, or CRRH) of which BHM, FGHM and a number of commercial Malian banks are shareholders. Since its creation in 2010, the CRRH mobilised about CFA Francs 95 billion (US$159 million)[viii] on the WAEMU bonds market.
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$22 795. This house was built on a 200m2 plot, over 59.62 m2. This means that it cost on average US$382.34 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$2 518 and US$3 358) in cities, all over the country. A standard galvanised iron sheet, often used in self-build initiatives, costs between CFA Francs 3 000 (US$5.0) for a 4kg sheet and CFA Francs 6 000 (US$10.1) for a 7kg sheet. The minimum acceptable size land plot is around 160m².
In 2012, with the completion of the Dio cement plant (in the Kati Cercle, or regional district) and the Diamou cement plant (in the Bafoulabé Cercle), there was a drop in the price of cement. A 50kg bag of cement costs US$ 7.55. This price might even decrease with the foreseen launching of the production of the Astro Cement plant, as well as the creation of a second plant by Diamond Cement Mali, one of the biggest producers in the country.
The average annual income as estimated by the per capita gross national income (Atlas Method) was at US$790 in 2015. 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.
The demand for housing in the agglomeration of Bamako is very high, at about 240 000 units, or more than half of the total national demand, by 2015. To meet this demand, the government of Mali has developed a National Housing Strategy.
In line with its National Housing Strategy, the government has established a generous subsidy programme to support the acquisition of affordable housing by eligible households. Households earning between CFA Francs 57 000 (US$95.7) and CFA Francs 150 000 (US$252) monthly are eligible to apply for a two-bedroom housing unit, and those earning between CFA Francs 150 001 (US$252) and CFA Francs 250 000 (US$420) a month can apply for a three-bedroom housing unit. These include a direct subsidy of up to 45 percent (including the land), of the cost of a housing unit, the remaining being born by the applicant through a mortgage or direct contribution.
Despite tremendous efforts by the government to provide housing to its population, self-construct remains the main mean 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.
In these conditions, and given the cost of providing housing on public spending, the Government of Mali relies more and more on public private partnerships for housing supply. The Office Malien de l’Habitat (OMH – Malian Housing Agency) plays a pivotal role in these partnerships in which the government is still bringing important public resources. As an example, in 2015, the Government of Mali through the OMH spent CFA Francs 23.5 billion (or US$39.5 million) on housing projects. For the year 2016, a total of CFA Francs 34.9 billion were provisioned in the OMH budget for housing projects. As part of its public-private partnership strategy to support housing supply, the Government of Mali signed several contracts with local as well as international investors. As such, the Association des Promoteurs Immobiliers (APIM – Malian Association of Real Estate Developers) became a choice partner and main interface between the Government of Mali and private investors. In March 2015 the Government signed a framework agreement with 19 national and international real estate operators through the APIM and with the Association professionnelle des banques et établissements financiers du Mali (APBEF), for the construction of 20 000 housing units costing in total CFA Francs 370 billion (US$621 million) to be delivered within two years. It is foreseen that 75 percent of these housing units will benefit the lower to middle income population. The units built through this partnership will be mainly located in the municipalities of Bamako and Kati and would comprise two-bedroom, three-bedroom and four-bedroom housing units. The construction of these housing units was launched in August 2015. In the same vein, the government signed a partnership with the Chinese company CMEC for the construction of 24 000 housing units for a total of CFA Francs 460 billion (US$785 million). However, it is important to highlight that the financial capacity of Malian real estate developers is not always up with the ambitious housing programme of the Government of Mali. As such, only 13 out of the 19 real estate developers, partakers of the framework agreement with the APIM were able to keep their commitment to supply their share of the 20 000 housing unit programme, and only 6 679 housing units were available as of June 2016. The failing six developers are under the threat of being excluded from the agreement. Indeed, the agreement requires developers to pre-finance the provision of the housing units on lands provided and serviced by the government. Then the government represented by the OMH buys those housing units and then sells them to households under direct purchase or leasing contracts.
Recently and as part of the agreement with Malian real estate developers, the Government of Mali and Ecobank Mali, and SIFMA, a private real estate operator signed a partnership for the construction of 500 large housing units (three-bedroom and four-bedroom units) in N’Tabacoro in the rural community of Kalabancoro-Kati for a total amount of CFA Francs 10 billion (about US$17 million). Likewise, Palmer Energy and Construction Corporation through its Malian branch of IISAT Mali was awarded a contract with the Mali government for the construction of 4 000 units with a first phase of a thousand units started in October 2015. This includes 2 675 two-bedroom housing units of 68.40 m2 built on 200 m2 lands, and 1 325 three-bedroom housing units of 98.53 m2 built on 250 m2 lands. Besides this contract, an agreement was signed with the Malian Ministry of Housing for the construction of 10 000 housing units (for Euro 267 million) in Bamako which was supposed to start in the first quarter of 2016.
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 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$50.4 million) were provisioned for the Secretariat while technical assistance will be provided by the French.
Despite the above-mentioned challenges, property markets function somehow in Mali, with the OMH, the BHM 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 20 years term at an average interest rate of about 10 percent a year interest rate. 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. As of July 2015, 2 052 housing units were delivered through government programmes in partnership with the BHM. These figures are far lower than the demand for housing, especially in the City of Bamako where the demand is highest.
Difficulties remain that hinder the efficient functioning of Mali’s property markets, despite significant efforts by the government. According to the World Bank’s 2016 Doing Business Report, access to construction permits involves 10 procedures, takes 125 days and costs 372.2 percent of the per capita income. This places Mali in 152nd place out of 189 countries, two places up from its 2015 Report ranking. This was due to the reduction of the time needed to obtain a geotechnical study. On the ‘registering property’ indicator, Mali ranked 140th out of 189 countries in 2016, two places up compared to 2015. Indeed, it takes five procedures and 29 days, and costs 11.9 percent of the property value to register a property.
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[ix] 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.
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 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$125.9) and CFA Francs 100 000 (US$ 167.9) 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 Mali Housing Agency (OMH).
The BHM was created as a specialised institution dedicated to offering housing finance services. 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
The government has estimated in a 2009 study, a housing demand of 440 000[x] units by 2015. The demand is from employees in the public and semi-public sectors, from the private sector, from NGOs and international organisations, and from housing co-operatives. According to the above-mentioned study, the Malian diaspora represents more than half of this demand, according to the Ministry of Housing, Land Issues and Urban Planning, which also estimated that an overwhelming majority (95 percent) of the Bamako population had expressed interest in acquiring a housing unit. Affordable housing is a steady segment of this demand, with more than 93 percent of housing co-operatives interested in both affordable housing units and serviced housing land. Some 71 percent and 66 percent of employees of the public sector and international organisations, respectively, also expressed interest in acquiring a housing unit. These are indicators of the untapped potential of the Malian housing sector, despite efforts by the government to meet housing demand. Several investors have shown interest in the sector, but 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. Opportunities also exist in the rental segment of housing, especially in urban areas where four inhabitants in ten are in demand for rentals.
Lastly, it is important to note that with the signing of a peace and power sharing agreement between the government and rebel groups, the political and economic situation in Mali has returned to almost normal, with several donors returning to the country and resuming their activities. With the highly positive response from the donors’ community at the October 2015 Mali Economic Recovery and Development Conference in Paris, perspectives for enhancing the infrastructure in Mali are very positive. The housing sector will benefit from that. However, with the strategic option taken by the government of using public-private partnerships as a tool to provide housing, first years of experience showed the limits in terms of capacities of local real estate developers. This means that there is room for new comers to join the housing supply sector in order to meet the growing demand.