Housing Finance in Benin


This profile is also available in French here.

To download a pdf version of the full 2023  Benin country profile, click here.

Benin is a French-speaking West African country. Benin’s population was predicted to be 12,123,198 people in 2021, with a 2.7% annual growth rate. The unemployment rate is considered low at 2%, yet 38.5% of people live in poverty. Population growth and rapid urbanisation have generated environmental issues such as the unsustainable use of natural resources, the proliferation of plastic garbage, problems with household waste management, and an increase in floods.

Benin’s economy has been resilient, with a GDP growth rate in 2021 estimated at 6.6% despite the protracted effects of COVID-19. The country was able to count on good performance in the agricultural sector, including the export of three main products: cotton, cashew nuts, and shea. The consumer price inflation rate stood at 1.7% in 2021, below the convergence criteria of the West African Economic and Monetary Union (WAEMU). This declining level of inflation is mainly due to the improvement in food imports.

Benin’s economy is primarily dependent on natural resources, making it sensitive to climate change effects. Benin adopted a national climate change adaptation plan in May 2022, with one of the strategic objectives being to promote a resilient system for the management and exploitation of natural resources and ecosystems. Two specific objectives have been defined for the infrastructure and urban planning sectors: promoting climate-smart urbanisation and developing sustainable cities. Furthermore, the country has a National Disaster Risk Reduction Strategy (2019–30). These strategies have an impact on the affordable housing sector’s urban development and sanitation components.

Housing supply in Benin is more informal than formal, and individuals construct their own homes using their own money. Cement and concrete building materials predominate in housing construction, particularly in cities. In general, building supplies have suffered significant inflation as a result of COVID-19 and the worldwide fallout from Russia’s invasion of Ukraine. The high cost of building materials raises the cost of affordable housing, which remains a significant concern.

The percentage of Beninis who use a mortgage to finance their housing remains low. This is due to the banks’ stringent mortgage requirements. Banks may lend amounts ranging from CFA 25 000 000 (US$ 39 679) to CFA 100 000 000 (US$ 158 717) according to the customer’s demands, which may include land acquisition, rehabilitation, or a new building. Microfinance has a little role in housing finance, while a portion of client loans are undoubtedly invested in real estate developments. It would be prudent for these organisations to investigate the viability of real estate financing alternatives.

Benin’s housing needs are becoming increasingly critical as its population grows and its large cities face increased pressure. Rising cement costs may offer chances for substitution with less expensive alternatives.

Find out more information on the housing finance sector of Benin, including key stakeholders, important policies and housing affordability:

Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2023 edition, which has up-to-date profiles for 55 African countries.

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