Despite most households in Africa financing their housing through savings, savings for housing is an under-developed area of product innovation and development. There is little research on the scope of savings, currently, for housing purposes and how this is organised by service providers and the savers themselves. To support market development, the Centre for Affordable Housing Finance in Africa undertakes research to understand how people save formally and informally through a variety of channels, and how these savings are used for housing. This is to identify national economic drivers and inhibitors of savings for housing and to make recommendations for both public and private practitioners to develop approaches that enhance savings for housing proposes.
The issue of loan-to-value ratios (LTVs) is a key area of focus, as formal savings rates are generally low and households operate on the edges of their affordability. High LTVs create risk concerns for lenders, results in premiums applied on interest rates and, ultimately, limits access to mortgages and other forms of housing finance.