Housing Finance in Cabo Verde

Overview

This profile is also available in French here.

To download a pdf version of a full 2022 Cabo Verde profile, in English, click here.

For the Portuguese version click here.

Cape Verde’s islands are defined by their limitations: resources, remoteness, vulnerability to natural disasters, a dry climate, and severe and prolonged droughts. In 2021, tourism (25% of GDP) and diaspora remittances accounted for 41% of its GDP. The pandemic severely destabilised the country in 2020, causing its GDP growth rate to fall by 27%.

The economy of this country has a direct impact on housing demand. With tourism being the most important sector of the archipelago’s economy, young people flock to the most popular islands in search of work, causing the demand for housing on these islands to skyrocket.

The refinancing of the Central Bank and customer deposits benefit Cape Verdean banks. The economy is heavily reliant on foreign direct investment. Privatization sparked the growth of foreign direct investment, which was then fueled by the real estate sector. Real estate is also growing as a result of bank financing of mortgage loans. The high ratio of non-performing loans to gross loans (12%) raises risk and undermines financial sector stability. Despite the fact that the Cape Verdean banking system has advanced to the point where 79% of the population has a bank account,23 access to housing finance remains uneven.In 2015, only 10.2% of Cape Verdeans had access to formal credit to finance their housing.

Access to housing in Cape Verde varies greatly depending on social class, area of residence, and gender. Cape Verdeans prefer to own their homes culturally. Indeed, 65% of households own their home, while 21% of the population rents their home. Cape Verde’s housing supply is characterised by a scarcity of family residential housing and developed land for housing, as well as a lack of territorials management instruments. 36 The residential property market is marked by economic inequality, with the low-income population living in self-housing and public or private real estate development responsible for housing reserved for the wealthy.

In terms of opportunities, it will be critical to financially support not only self-construction and the rehabilitation of low-quality housing but also housing cooperatives, informal savings groups, and microcredit institutions, which are the most accessible financing instruments for these populations. The development of lease-purchase products with extremely low monthly amortisation costs could also compensate for low-income households’ lack of access to bank loan services.

The majority of Cape Verdean households are unable to afford formal housing due to the high cost of land and building materials. As a result, many households are turning to more affordable rental or self-construction options. In 2015, 35% of the population was still impoverished.

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


Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2022 edition, which has up-to-date profiles for 55 African countries.

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