Housing Finance in Comoros

Overview

The Union of Comoros (Comoros) is an archipelago of three main islands and several islets located in the Western Indian Ocean. Each island has autonomous status with independent administration and management autonomy.[1] The estimated population of Comoros as of 2021 was 888,456, a slight increase from the 2020 figure of 869 595.[2] The United Nations estimated that approximately 30% of the population lived in urban areas in 2021.[3] Comoros is densely populated, with approximately 465 inhabitants per km2.[4] High population density, linked to limited land space, places intense pressure on natural resources, the environment and the demand for adequate housing.

Comoros’ economy is undiversified and largely dependent on foreign aid, remittances and tourism. It is also amongst the most food-import dependent in the world. Thirty percent of economic activity in Comoros is generated by agriculture produced on small family owned farms and destined mainly for home-consumption but the country meets most of its food needs through imports.[5] Weak connectivity between the three islands translates into high transport costs, coupled with lack of other supporting infrastructure (like warehousing, cold storage etc.) this limits the ability of higher agricultural productivity.[6] Economic activity more generally rebounded in 2021 with gross domestic product (GDP) growth of 1.9%, up from 0.2% in 2020.[7] The country is projected to reach 2.8 % in 2022 on the back of an expansionary fiscal policy. The slow recovery reflects difficulties in the service sector as well as economic consequences of the pandemic and the Russian invasion.[8] By the first quarter of 2022 trade increased by 37% compared to the first quarter of 2021.[9] Transfers from the diaspora increased by 18.3% in the first 9 months of 2021 and foreign exchange reserves are estimated at 9 months of imports.[10] Moreover, the inflation rate is projected to increase significantly in 2022, while the poverty rate is expected to decrease only moderately over the next two years and return to its pre-COVID levels at 39.5% in 2023.[11] In the second quarter of 2022, prices to consumption recorded an increase of 3.4% compared to first trimester, mainly due to the increase of the prices of accommodation, water, gas, electricity and others fuels, following the decision made by the government to increase product prices tankers on May 31, 2022.[12] The increase in price of housing services is mainly attributable to the increase electricity bill and kerosene compared to the same period of the year 2021.[13]

The World Bank’s 2020 Doing Business report ranks Comoros at 160 out of 190 countries surveyed for ease of doing business compared to 164 in 2019. Comoros’ Human Development Index (HDI) value for 2021 was 0.558, which puts the country in the medium human development category, positioning it at 156 out of 191 countries and territories.[14] Low and medium HDI countries have seen increases in autonomy and strength of feminist movements.[15]

Comoros is 97 out of 180 countries on the 2021 Global Climate Risk Index[16] with a Climate Risk Index (CRI) score of 90. The CRI indicates a level of exposure and vulnerability to extreme events, which countries should understand as warnings in order to be prepared for more frequent and/or more severe events in the future.[17] In Comoros, climate change is seen in increased frequency and intensity of cyclones, longer dry seasons, and rising sea levels, with the agriculture and biodiversity sectors the most vulnerable.[18] The Comorian coastline, where 88% of the population lives, is expected to experience a 20 cm rise in sea level by 2050.[19] The sea level rise and coastal erosion are further aggravated by unregulated urban expansion and rapid environmental degradation.[20] Shortcomings in spatial planning and prevailing inadequacies in construction standards for the built environment increase the country’s vulnerability to natural disasters, especially for poor urban dwellers.[21] The residential sector alone is estimated to absorb 80% of the combined losses from earthquakes, floods, and tropical cyclones.[22]

[1] World Bank (2020). Reimagining Urbanization in Comoros: Building communities today to transform lives

tomorrow. https://documents1.worldbank.org/curated/en/471791612255765765/pdf/Comoros-Urbanization-

Review-Reimagining-Urbanization-in-Comoros.pdf (Accessed 28 August 2022). Pg. 24.

[2]United Nations Population Division (2021). World Population Prospects: 2019 Revision. https://data.worldbank.org/indicator/SP.POP.TOTL?locations=KM (Accessed 28 August 2022).

[3]United Nations Population Division. (2021). World Urbanization Prospects: 2018 Revision. https://data.worldbank.org/indicator/SP.URB.TOTL.IN.ZS?locations=KM&name_desc=false (Accessed 28 August 2022).

[4]The World Bank. The World Bank in Comoros. https://www.worldbank.org/en/country/comoros/overview. (Accessed 24 September 2022).

[5]The World Bank. Comoros – Towards a More United and Prosperous Union of Comoros : Systematic Country Diagnostic.http://documents.worldbank.org/curated/en/354101559590231457/Comoros-Towards-a-More-United-and-Prosperous-Union-of-Comoros-Systematic-Country-Diagnostic. (Accessed 24 September 2022).

[7]African Development Bank. (2022). African Economic Outlook 2022 https://www.afdb.org/en/documents/african-economic-outlook-2022 (Accessed 5 September 2022). Pg. 142.

[8]Ibid. Footnote 5.

[9]Central Bank of the Comoros. (2022). Quarterly bulletin: First quarter 2022 http://www.banque-comores.km/DOCUMENTS/Bulletin_BCC_n%C2%B034_Mars_2022.pdf (Accessed 6 September 2022)

[10]African Development Bank. (2022). African Economic Outlook 2022 https://www.afdb.org/en/documents/african-economic-outlook-2022 (Accessed 5 September 2022) pg. 142.

[11]The World Bank. The World Bank in Comoros. https://www.worldbank.org/en/country/comoros/overview. (Accessed 24 September 2022).

[12]The Central Banks of Comoros (2022) Quarterly Bulletin June 2022. http://www.banque-comores.km/DOCUMENTS/Bulletin_BCC_n%C2%B035_Juin_2022.pdf (Accessed 5 September 2022).

[13]Ibid.

[14]United Nations Development Programme. (2021) Human Development Report 2021/2022. https://hdr.undp.org/system/files/documents/global-report-document/hdr2021-22pdf_1.pdf (Accessed 5 September 2022). Pg. 279.

[15]Ibid. Pg. 204.

[16]The Global Catastrophic Risk Institute (2021) Global Climate Risk Index 2021 https://www.germanwatch.org/sites/default/files/Global%20Climate%20Risk%20Index%202021_2.pdf (Accessed 5 September 2022). Pg. 43.

[17]ibid. Pg. 3.

[18]African Development Bank. (2022). African Economic Outlook 2022 https://www.afdb.org/en/documents/african-economic-outlook-2022 (Accessed 5 September 2022). Pg. 142.

[19] World Bank (2020). Reimagining Urbanization in Comoros: Building communities today to transform lives

tomorrow. https://documents1.worldbank.org/curated/en/471791612255765765/pdf/Comoros-Urbanization-

Review-Reimagining-Urbanization-in-Comoros.pdf (Accessed 28 August 2022). Pg. 12.

[20] Ibid.Pg. 12.

[21] Ibid.Pg. 10.

[22]ibid.). Pg. 68.

Access to Finance

Comoros has a relatively small and underdeveloped financial sector. The Central Bank of Comoros has exclusive jurisdiction for the approval of banks and financial institutions. In June 2022 the banking and finance sector of Comoros comprised of thirteen financial institutions and electronic money institutions, as approved by the Central Bank of Comoros. In terms of market share, the Union des Meck remains the most requested institution both for the demand for credit and for the collection of the eparch of the Comorian banking system with 29% of the market share.[1]

The deposits made at the system level amounted to KMF 159 billion (US$336 927 573) in December 2021 after KMF 130.7 billion (US$276 958 703.09) in December 2020, thus recording an increase of 21.6%.[2] After falling in the last quarter of 2021, deposits made at the level of the banking system recorded an increase of 2.3% to reach KMF 162.7 billion (US$ 344 768 025.95) at the end of March 2022 after KMF 159 billion (US$ 336 927 573) three months earlier. This improvement comes from private companies and individuals whose filings to the system increased compared to the previous quarter.^[3] The public debt ratio as a percentage of GDP was 26.8% at 30 June 2021, (divided between external debt for 23.4% and domestic debt at 2.8%) against 26.12% at 31 December 2020.^[4] By maturity, the increase in loans was driven by those in the short, medium and long term which increased from KMF 37.1 billion (US$78 616 433.7 ) in December 2020 to KMF 42.6 billion (US$90 271 161.07)  a year later. Medium and long term loans increased by 46.2% to KMF 35.9 billion (US$ 76 073 584.09) in December 2021 against KMF 24.6 billion (US$ 52 128 416.95). Outstanding debts decreased by 6.1% between 2020 and 2021, from KMF 19.8 billion (US$41 957 018.52 ) in 2020 to KMF 18.6 billion (US$ 39 414 168.92) a year later, with the rate of bad loans falling to stand at 16.8% after 22% a year earlier. Provisioned at a high level of 73.5%, the net bad loan rate increased from 8% to 5% between 2020 and 2021.^[5]

With regard to the banking sector, the consolidated balance sheet of banks increased from KMF 189.4 billion (US$ 401 346 429.72) at the end of December 2021 to KMF 193.9 billion (US$ 410 882 115.75) at the end of March 2022, an increase of 2.4% in line with the increase in loans to the customers (+4.8%).[6] Loans granted by the banking system amounted to KMF 97.2 billion (US$ 205 970 818.21) in December 2021 after KMF 81.5 billion (US$ 1 717 483 005.75) in December 2020. The rate of nonperforming loans in the banking system remained high, at 20.3% in 2021 and the risk of debt distress remained high mainly because of the large volume of non-concessional loans.[7] Among the economic measures established to deal with the coronavirus pandemic, the Central Bank of Comoros decided in 2020 to increase the reserve requirement ratio from 15% to 10%. However, it was only during the year 2021 that domestic credit began to improve.[8] The Central Bank of Comoros continued its expansionary monetary policy in 2021 by maintaining the reserve requirement rate.[9]

The main challenges faced in the financial services sector include insufficient financial infrastructure and distribution channels the costs and fees applied by financial institutions and a low level of financial education. Financial inclusion in Comoros is therefore characterised by limited access and low use of financial products by households. The number of borrowers per 1 000 adults was only 11 in 2019.[10] The rate of banking is very high in big cities such as Mutsamudu, Bambao and Fomboni as it is much more profitable for institutions to serve customers in urban areas. However, the high costs and fees charged by formal institutions have led to the exclusion of many in the urban areas, with deposit fees varying between 3% and 1.75% per annum, and loan rates often exceed the ceiling 14% set by the Ministry of Finance since 2009.[11]

Weaknesses in the banking system and its environment continue to hinder the provision of credit to the economy and undermine asset quality. Banks in Comoros suffer from weak underwriting and risk management processes, often significant credit risk concentration, recurring government arrears, and shortcomings in the judicial system that inhibit attaching collateral.[12] Further, a lack of financial infrastructure inhibits interbank lending. Banks cannot borrow from, or lend to, other banks and the Central Bank of Comoros as there is no organised market, no lending instrument, and no collateral (the government does not yet issue any bills or bonds).[13] However, there are currently plans underway to improve the operating environment for banks, including by lowering the frequency of government arrears to suppliers and further strengthening the judicial system to ensure that banks can realise pledged collateral. In this context, a commission on Non-Performing Loans (NPLs), comprising of the Ministry of Finance, the Ministry of Justice and the Central Bank of Comoros, have recently issued recommendations on accelerating the drafting of court decisions.[14] Separately, there is a planned restructuring of SNPSF following the issuing of a decree splitting SNPSF into postal and banking activities, which recapitalisation and restructuring is estimated would require KMF 12 694 419 640 (US$ 26.9 million) (2.1% of GDP).

The World Bank’s 2020 Doing Business report ranks Comoros at 132 for accessing credit (up from 124 in 2019 and 122 in 2018). Comoros is currently ranked 168 in respect of resolving insolvency. This position has been the same in 2018 and 2019. There is no stock exchange in the country, nor are there primary or secondary fixed-income markets for government or commercial debt. Government financing is mostly undertaken in the form of direct credit from domestic commercial banks, and liquidity levels are controlled through the modification of reserve requirements only.

In Comoros, access to bank credit is very limited for women. To overcome this, microfinance institutions offer specific financial products for women and adopt more flexible measures in granting loans. Microfinance institutions in Comoros include Savings and Credit Mutuals ya Komor (MECK). The MECKs are made up of a network of 14 basic funds: 9 funds in Grande Comore, 4 in Anjouan and 1 in Moheli. The share capital is held entirely by its members and in 2018, more than 100,000 members used the services of the MECK network, which is approximately 13% of the population.[15] The Mutuelle d’Epargne et de Crédit Ya komor-Moroni (MECK-Moroni) is a cooperative with a democratic mode of operation, whose main objectives are to work for sustainable economic development by ensuring the financial inclusion of all segments of the population, more particularly the women and young people. Women represent 55% of loan recipients at MECK-Moroni. Different types of loans granted by MECK-Moroni include the social loan which takes into account the constraints of the family economy and can be used in particular for housing or equipment.[16] Despite these improvements, the cost of borrowing represents the main challenge for low-income women and the disadvantaged and women in urban and rural Comoros face almost similar barriers to financial access and there is in general a lower rate of borrowing from the financial institutions.[17]

[1]The Central Banks of Comoros (2022) Economic report for the year 2021 http://www.banque-comores.km/DOCUMENTS/Note_Conjoncture_Ann%C3%A9e_2021.pdf (Accessed 5 September 2022). Pg 11.

[2] The Central Bank of the Comoros. (2022). Communication of the Central Bank of the Comoros on the Illegal Exercise of Activities Offshore Banking http://www.banque-comores.km/DOCUMENTS/CommuniqueDeLaBCCSurExerciceIllegalActivitesBancairesOffshores.pdf (Accessed 6 September 2022). Pg 13.

[3]The Central Bank of the Comoros. (2022). Quarterly bulletin: First quarter 2022 http://www.banque-comores.km/DOCUMENTS/Bulletin_BCC_n%C2%B034_Mars_2022.pdf (Accessed 6 September 2022). Pg 12.

[4] The Central Bank of the Comoros. (2022). Debt statistical bulletin (2nd half of 2021) http://www.banque-comores.km/DOCUMENTS/Bulletin_Statistique_Dette_S2_2021.pdf p4 (Accessed on 4 September2022). Pg 3.

[5]The Central Banks of Comoros (2022) Economic report for the year 2021 http://www.banque-comores.km/DOCUMENTS/Note_Conjoncture_Ann%C3%A9e_2021.pdf (Accessed 5 September 2022). Pg 12.

[6] The Central Bank of the Comoros. (2022). Quarterly bulletin: First quarter 2022 http://www.banque-comores.km/DOCUMENTS/Bulletin_BCC_n%C2%B034_Mars_2022.pdf (Accessed 6 September 2022). Pg i.

[7]ibid.

[8]Ibid. Footnote 28. Pg 10.

[9] African Development Bank. (2022). African Economic Outlook 2022 https://www.afdb.org/en/documents/african-economic-outlook-2022 (Accessed 5 September 2022). Pg. 142.

[10] Ibid Footnote 29. Pg. 17.

[11]ibid. Pg. 20.

[12]International Monetary Fund (February 2022). IMF Country Report No. 22/32. https://www.imf.org/-/media/Files/Publications/CR/2022/English/1COMEA2022001.ashx (Accessed 6 September 2022). Pg 34.

[13]Ibid.). Pg35.

[14]Ibid. Pg. 35.

[15]Womenconnect. Access to capital. https://www.womenconnect.org/web/comoros/access-to-capital (Accessed 24 September 2022).

[16]ibid.

[17]Islamic Research and Training Institute. Empowering Women Through Financial Inclusion: Some Evidence From Comoros. https://archive.aessweb.com/index.php/5007/article/view/3115/5768. (Accessed 24 September 2022).

Affordability

The poverty rate was estimated at 39.8% in 2021, little changed from the 40.4% estimated in 2020.[1] Nearly one fourth of the population is extremely poor and one-fourth of Comoros’ population lives just below the national poverty line, with 10% of the population at risk of falling below the national poverty line in the event of unexpected economic shocks.[2]

At present, housing loans are mostly accessible to private sector employees and senior civil servants. However, financial institutions are aiming to offer housing loans at lower costs. To this effect, it was recommended that mechanisms of financing be put in place to partly make up for the insufficiency of public resources, and also to mobilise all the partnerships likely to facilitate access to housing for more people, for example by creating a solidarity fund. Most of the country’s building stock – 56%– is located in rural areas and Comoros requires higher levels of investment to catch up with building backlogs in urban areas.[3]

The BFC provides long term credit with a maximum duration of 120 months or more depending on the case and by committee opinion and a maximum rate of 13% plus a commission of 3/1000 on the highest debit of the quarter.[4] For mortgages a warranty through a bare or built land, belonging to the borrower, or mortgage surety, belonging to another person, is required.[5]

Remittances play a vital role in household budgets but customary practices are estimated to absorb between 50 and 70% of amounts transferred to the country.[6]. Over one year, transfers of money issued and received experienced respectively a growth rate of 12.6% and 26.4%.[7] However, remittances contribute to increasing disparities and disincentivise the central government to transfer funding to the local level, as remittances are often invested towards building social infrastructure such as mosques, community centres, clinics or schools, bypassing government structures.[8]

[1]African Development Bank. (2022). African Economic Outlook 2022 https://www.afdb.org/en/documents/african-economic-outlook-2022 (Accessed 5 September 2022). Pg. 142.

[2]The World Bank. The World Bank in Comoros. https://www.worldbank.org/en/country/comoros/overview. (Accessed 24 September 2022).

[3] Ibid.Pg 58.

[4]Banque Federale de Commerce. https://www.bfcbanque.com/la-banque/pourquoi-choisir-la-bfc (Accessed 24 September 2022).

[5]Ibid.

[6] World Bank (2020). Reimagining Urbanization in Comoros: Building communities today to transform lives

tomorrow. https://documents1.worldbank.org/curated/en/471791612255765765/pdf/Comoros-Urbanization-

Review-Reimagining-Urbanization-in-Comoros.pdf (Accessed 28 August 2022). Pg. 51.

[7]Central Bank of the Comoros. (2020) Quarterly Bulletin: 1st Quarter 2020. http://www.banque-comores.km/DOCUMENTS/Bulletin_BCC_n26_mars_2020.pdf (Accessed 9 August 2020). Pg. 1.

[8] Ibid. Footnote 46.Pg 51.

Housing Supply

Comoros lacks sufficient land administration and the government does not have sufficient access to land for development projects.[1] A large proportion of residential buildings are made of corrugated or galvanized metal sheets. The quality of construction materials varies significantly between islands with only ten percent of housing units built to code, however, unit construction costs and structural typologies at the island level are assessed to be comparable in urban and rural areas.[2] Construction waste is often reused for embankments or for new construction and the introduction of regulatory parameters is needed to reduce the uncontrolled reuse of construction materials, which, when recycled, often decreases the structural integrity of buildings, thereby reducing their resilience.[3] Comoros has weak capacity for spatial planning and poor building construction standards and this has been displayed in its vulnerability to the effects of natural disasters, which have seen strategic infrastructure, internal and inter island means of transportation destroyed in the past by tropical cyclones.[4]

On 11 August 2022,the Development Bank of Southern Africa (DBSA) welcomed a ministerial delegating from Comoros to explore cooperation in infrastructure development. The delegation from the Union of Comoros was led by the island nation’s Minister of Agriculture, Fisheries, Environmental Affairs and Tourism. Whilst the cooperation is still in its early stages of deliberation, the DBSA has expressed interest to support Comoros in delivering impactful bilateral development finance solutions. These interventions will see to the rehabilitation and overall economic development of the island nation’s infrastructure, including but not limited to road construction, water, sanitation, tourism, and energy.[5]

[1] Ibid.Pg 90.

[2]Ibid.). Pg 58-59.

[3] Ibid.Pg 99 – 100.

[4] World Bank (2020). Reimagining Urbanization in Comoros: Building communities today to transform lives

tomorrow. https://documents1.worldbank.org/curated/en/471791612255765765/pdf/Comoros-Urbanization-

Review-Reimagining-Urbanization-in-Comoros.pdf (Accessed 28 August 2022). Pg 57.

[5]Development Bank of Southern Africa. Union of Comoros Visits South Africa to Explore Potential Investment Opportunities.https://www.dbsa.org/press-releases/union-comoros-visits-south-africa-explore-potential-investment-opportunities. (Accessed 24 September 2022).

Property Markets

In 2022, the price of the cheapest, newly built house by a formal developer or contractor in an urban area with a size of 150 m² is KMF30 000 000 (US$ 61455).[1] The typical monthly rental price for the cheapest, newly built house by a formal developer or contractor in an urban area is KMF250 000 (US$ 512).[2] The minimum size of a residential plot in urban areas is 300 m².[3] The typical land costs per square meter in urban areas is KMF35 000 (US$ 71,70).[4] The Construction labour costs per square meter in local currency units for the cheapest, newly built house is KMF75 000 (US$ 153,64)[5]and the total construction costs per square meter in local currency units for the cheapest, newly built house is KMF200 000 (US$409,70).[6]

Foreigners who make substantial investments in the country are eligible to apply for Comorian nationality under the Economic Citizenship Act, passed in 2008. The World Bank’s 2020 Doing Business report ranks Comoros at 113 for registering property compared to 114 in 2019. The process entails four procedures and takes approximately 30 business days to complete. The process will cost approximately 7.6% of the property value. With regards to dealing with construction permits Comoros is ranked at 101 and the process takes 11 procedures but entails a waiting period of approximately 107 days.

An overlap of three land regimes prevents land from being sold and rented out and limits farmers ability to collateralize their land to obtain access to financing. The absence of a land registry coupled with an inefficient court system leave many land conflicts at stalemate.[7] The lack of land tenure security binds poor families to the land they cultivate and limits their abilities to complement their on-farm with off farm earnings. A clear land tenure system would support the environment for investment and private sector development more generally.[8]

 

[1] Abdulkader Muhammad Al Baqir. I2a Immobilier SARL (2022). http://www.i2a-immobilier.com/ (Accessed 5 September 2022).

[2] Ibid.

[3] Ibid.

[4] ibid.

[5] Ibid.

[6] Ibid.

[7]The World Bank. Towards a more united & prosperous union of Comoros. https://documents1.worldbank.org/curated/en/354101559590231457/pdf/Comoros-Towards-a-More-United-and-Prosperous-Union-of-Comoros-Systematic-Country-Diagnostic.pdf (Accessed 27 September 2022). Pg 21 – 22.

[8]Ibid.). Pg 21 – 22.

Policy and Legislation

Disagreements over land rights, particularly in urban areas, have constrained municipalities’ ability to identify public land and regulate its use. Poor land use management and a lack of safe waste disposal or recycling solutions at the local level and at a wider regional level negatively affects Comoros’ environment and landscape.[1] Environmental issues in Comoros are governed by the framework law on the environment (No. 94-018 of June 22, 1994 modified by No. 95-007 on 19 June 1995), which purports that every Comorian citizen has the fundamental right to live in a healthy environment.[2] Cities in Comoros are not equipped with sufficient infrastructure to supply water to the growing population and access to water is generally higher in urban areas[3] and the Comoros’ water supply also suffers from excessive fragmentation.

At the country level, Cyclone Kenneth demonstrated that disaster risk management is the responsibility of all sectors in Comoros. Reconstruction efforts need to consider resilient construction practices, building code adoption and enforcement. Comoros faces a threat from climate and seismic risks, including volcanic activity. There is a need for strengthening disaster risk management and better spatial planning.[4] Rigid minimum housing standards, such as minimum room sizes of 9m2 for residential, and 12m2 for shops, or minimum plot sizes of 200m2, make a lot of the existing building stock illegal, and formalisation of construction less affordable.[5] Building codes need to be significantly updated while accounting for the effects of climate change, in particular, flooding.[6] This is critical for the housing sector.

The rules governing land in Comoros are a concurrent system of colonial, Islamic and customary rules. These comprise the law derived from colonial French law (Code civil), the rules rooted in Islamic jurisprudence that mostly apply to communal spaces of public and/or religious use and the rules emanating from customary rights, which exclusively govern family land ownership.[7] Comoros has a matrilineal society and it allows women to enjoy informal power within communities. Matrilinearity determines inheritance of property, house and land, however, women generally need the consent of their family, husbands’ uncles or brothers to exert their usufruct rights and the possibility to mortgage their house.[8] Despite gender equality being enshrined in the Constitution, women are under-represented in the civil service, where a gender-biased patronage system works against them and although, women generally inherit land and houses according to custom, they do not always have usufruct rights, which tend to go to their husbands, maternal uncles, or brothers.[9]

In recent years, the government has undertaken several measures to enhance financial intermediation and strengthen the country’s banking and financial sectors. Such efforts include the facilitation of entry for foreign banks, reforms to the investment code in 2007, and establishing a National Agency for Investment Promotion. The government has, in collaboration with the Central Bank of Tanzania, the Central African Banking Commission, the French Prudential supervisory authority and the International Monetary Fund, strengthened regulatory and supervisory frameworks to expand the scope of prudential regulations and increase the effectiveness of control procedures. In line with the credit risk management, old doubtful or contentious debts with a maturity of more than three years will have to be fully provisioned.

[1] World Bank (2020). Reimagining Urbanization in Comoros: Building communities today to transform lives

tomorrow. https://documents1.worldbank.org/curated/en/471791612255765765/pdf/Comoros-Urbanization-

Review-Reimagining-Urbanization-in-Comoros.pdf (Accessed 28 August 2022). Pg 10.

[2] Ibid.Pg 97.

[3] Ibid.Pg 94.

[4] Ibid.Pg 15-16.

[5] Ibid.Pg 83.

[6] Ibid. Pg 106.

[7] Ibid.Pg 86.

[8] Ibid. Footnote 62.Pg 75.

[9]The World Bank. Towards a more united & prosperous union of Comoros. https://documents1.worldbank.org/curated/en/354101559590231457/pdf/Comoros-Towards-a-More-United-and-Prosperous-Union-of-Comoros-Systematic-Country-Diagnostic.pdf (Accessed 27 September 2022). Pg 28.

Opportunities

Comoros remains vulnerable to natural disasters and the housing sector in Comoros, particularly on the coastline, is highly exposed to natural and climate related disaster risks. This is a result of shortcomings in spatial planning construction standards in the country. The country is in need of more resilient construction practices, better building code adoption and enforcement. There is a need for the upgrading of the existing building stock in the country and the formalisation of construction.

The country faces challenges of access to financial services, insufficient financial infrastructure and distribution channels which in term result in high costs and fees being applied by financial institutions. This has resulted in limited access and low use of financial products by households and the rate of banking being lower in smaller cities and less urban areas. The unemployed in the country often turn to the informal sector for work and this has had the effect of increasing the percentage of the unbanked population and those without access to credit.

The authorities in the country hope to transform Comoros into a dynamic emerging market over the next decade by strengthening human capital, infrastructure and governance. To this end, the country has been seeking aid and foreign direct investment in support of their strategy.[1] The country is in particular need of aid and foreign direct investment due to severe constraints on domestic resources, weak fiscal revenue and a high public wage bill.

[1]International Monetary Fund (2020). IMF Country Report No. 20/198 https://www.imf.org/~/media/Files/Publications/CR/2020/English/1COMEA2020002.ashx (Accessed 28 August 2022) pg. 4.

Availability of Data on Housing Finance

Information on the financial sector is published on an annual basis and in quarterly bulletins by the Central Bank of Comoros.

The Comoros Ministry of Agriculture, Fisheries, Environment, Territory Planning and Urban has the responsibility of overall administration of housing and related issues and is meant to publish information on housing but its website has been under construction and cannot presently be accessed. Lack of data related to the environmental sector is significant and where data is available it is either outdated or suffers from inconsistencies. To inform policymaking, the country’s natural capital values (especially water, fisheries and coastal resources, forestry and protected areas) need to be thoroughly assessed so that the continuous loss in forests, soil fertility, water, biodiversity, fisheries are no longer economically invisible but are fully considered to inform policy development.

Given the limited access to information on housing in the country, the few real estate agencies that operate in the country can be a source of information on the state of the housing sector in the country.

Green Applications for Affordable Housing

There is no explicit policy in place in Comoros to encourage the development of renewable energy sources. The government has rallied energy stakeholders around Comoro’s Horizon 2030, a medium-term strategic objective. The Ministry of Energy is currently in charge of the electricity delivery. The energy sector, however, is not governed by any laws or regulations. Comoros faces challenges with the high cost of carbon-based power and more than 65% of electricity generation is financed by the government.[1] Fossil fuels and hydropower are currently the main energy suppliers in Comoros and as a result Comoros is sensitive to the consequences of climate change global energy price volatility.[2]

Due to the small size and dispersed nature of Comorian cities, the costs of service infrastructure, such as piped water and electricity, are higher than elsewhere in East Africa. According to the African Development Bank, access to electricity remains relatively limited in Comoros, with only 8% of the population being serviced in the three islands of Grande Comore, Moheli and Anjouan. When compared to urban households, access to electricity drops by 8% in informal settlements and access to drinking water drops by half from 67% to 31%, and is  the lowest in Moroni, where only 22% of households have access  to safe water.

[1]Magloire Fopokam Tene (2022). Energy Crisis in Africa: the case of Comoros. https://labgov.city/theurbanmedialab/energy-crisis-in-africa-the-case-of-comoros/ (Accessed 28 August 2022).

[2]Ibid.

Websites

African Development Bank Group: www.afdb.org/en/

Organisation for Economic Co-operation and Development: www.oecd.org

The National Institute of Statistics and Economic and Demographic Studies: www.inseed.k