In the past two decades, financial institutions have formed strong partnerships with DFIs to ensure a constant supply of loanable funds, for their diverse portfolios. As is the case in Kenya, loans and lines of credit dominate (95%) the investment tools, in Rwanda. EIB and BRD have been instrumental in boosting I&M bank’s ability to offer long term finance to the housing sector. EIB advanced facilities of over EUR 5M for 7 years to I & M Bank to support SMEs involved in various business sectors including construction and manufacturing, thereby providing vital inputs to the housing sector. Another key mortgage lender in the industry is KCB Bank. A number of international institutional investors have advanced resources to KCB, to enhance its outreach and operational efficiency in Rwanda. EIB advanced a EUR 5M facility to support SME, at interest rates of 9.5 to 11.4% on the RWF and 4.4% on the USD. In 2011, the bank concluded credit agreements with AFD (USD 20M, Libor + 3.74%) and AfDB (12M, Libor + 4.15%). These two lines of credit, combined with three medium term facilities from EADB (USD 10M), PTA (USD 10M) and OPEC (USD 10M) boosted the bank’s ability to lend long-term to the housing sector, creating over 1,700 construction and home loans.
The report presents an in-depth analysis of the landscape of investment in Kenya. It provides useful data on existing DFI investors, the type of instruments they use to invest and the investment environment they operate in. The report forms part of The Centre for Affordable Housing Finance’s Investor Programme which aims at quantify the breadth of investment activity with respect to housing and housing finance across Africa, and to establish a mechanism to track this on an ongoing basis. This project has collected data and highlights gaps and opportunities in the investment landscape. With the aim of stimulating greater investment in affordable housing and connecting investors with potential investments, the report profiles investors and investment instruments with the greatest impact on the housing finance market within the EAC Region. Growing financial sector experience and increasingly sophisticated financial instruments are driving Investor interest in African real estate. This includes new market opportunities related to a rising urban middle class, an increasingly localized construction material industry and innovations in housing finance such the emergence of Real Estate Investment Trusts and mortgage liquidity facilities across Africa.