Housing Finance in Comoros
Overview
This profile is also available in French here.
To download a pdf version of the full 2021 Comoros country profile, click here.
The Union of Comoros has the estimated population as of 1 July 2021 was 888 451, a slight increase from the 2020 figure of 869 595. The United Nations estimates that around 29.4% of the population lives in urban areas, making Comoros one of the least urbanised populations in Africa. Urban areas in Comoros include Moroni, Fomboni, and Mutsamudu and these serve as the country’s municipalities. Human Development Index for Comoros in 2019 was 0.554 (0.583 for men and 0.519 for women) being one of the lowest at 156 out of 189 countries. The Gross National Income (GNI) per capita in Comoros has increased by approximately 1.5% between 1990 and 2019. However, low levels of development activity, extreme poverty levels, and political instability have curtailed the expansion of housing sector development, including social housing for the poor.
Comoros is one of the world’s poorest and smallest countries, with most of its population (especially those living in rural areas) relying on subsistence agriculture and fishing for their livelihoods. Subsistence agriculture yields maize, cassava, sweet potatoes, coconuts, yams, and rice, with most essential food supplies being imported. Comoros is the second-largest producer of vanilla and the world’s leading producer of ylang-ylang perfume oil. However, it is plagued by poor economic conditions, overpopulation, severe unemployment, climate change, poor harvests, and a lack of adequate transportation. About 25% of GDP and the foreign exchange inflows from these transfers exceed those derived from exports and migrant remittances mostly from France and Madagascar.
The country applied a non-containment strategy to fight the pandemic and did not institute a total lockdown on free movement. The real GDP declined by -0.9% in 2020 compared with 2% growth in 2019, due to a reduction in tourism revenues and a decline in the export of cash crops. Moreover, restrictions on international travel in 2020 strongly affected the service sector which accounts for more than 50% of GDP. From the demand side, consumption of goods stagnated while the growth in the investment rate fell in 2020 to 1.8%, up from 10.5% in 2019. The budget deficit in 2020 increased to 3.6% of GDP, compared with 2.1% in 2019. This is due to the economic slump brought about by the COVID-19 crisis leading to a lower collection of tax revenues. According to World Bank’s Doing Business 2020 report, Comoros was placed at 160 out of 190 countries surveyed in 2020 compared with 164 in 2019.
By the end of 2021, the Comorian economy is expected to grow by 3.5%, depending on the relaxation of COVID-19 lockdowns both globally and within the country. Travel restrictions have been relaxed and the airport is open to visitors with a negative test within the last 72 hours. As of July 2021, Comoroshas received 100,000 doses of the Chinese Covid-19 vaccine and distribution has already begun. It is also likely to receive 20% vaccine coverage by the end of 2021 through the COVAX initiative. The Comorian economy is also slowly recovering with budget deficits expected to reduce to 2.4% of GDP by the end of 2021. The current account deficit is expected to decline to 3.6% of GDP with an increased flow of external resources and financing in 2021.
Find out more information on the housing finance sector of Comoros, including key stakeholders, important policies, and housing affordability:
- Introduction
- Access to Finance
- Affordability
- Housing Supply
- Property Markets
- Policy and Regulations
- Opportunities
- Availability of data on housing finance
- Urban Informality
- Websites
Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2021 edition, which has up-to-date profiles for 55 African countries.
Download yearbookComoros
Introduction
Comoros comprises of three main islands, namely Anjouan (also called Ndzuani), Mohéli (Mwali) and Grande Comore (Ngazidja), and several islets. Comoros had an estimated population of 850 886 in 2019, a slight increase from an estimated population of 832 322 in 2018.[1] The United Nations estimated that approximately 29.16 percent of the population lived in urban areas in 2019.[2] Urban areas in the country include Moroni, Mutsamudu and Fomboni and these also serve as the municipalities in the country. Moroni, located on the semi-autonomous island Grande Comore, is both the capital and the largest city in Comoros.
Economic development in Comoros has recently been affected political uncertainty following a constitutional referendum in mid-2018 and elections in early 2019. The national congress convened in February 2018 to assess conditions after 42 years of independence and recommended an overhaul of the system of a rotating presidency among the islands through potential constitutional reforms. In elections held in 2019, the Comoros election body declared President Azali Assoumani re-elected.
Comoros is one of the poorest countries in the world and most of its population relies on agriculture and fishing for sustenance. The World Bank’s Doing Business 2020 report ranks Comoros at 160 out of 190 countries surveyed in ease of doing business compared to 164 in 2019.The economy is highly dependent on foreign aid, remittances and tourism. In 2019, economic activity in Comoros was affected by Cyclone Kenneth which hit the country on 25 and 26 April 2019, and caused destruction of electrical installations, roads, homes, schools and production capacities.[3]
With approximately 447 inhabitants per square kilometre in 2018,[4] Comoros is densely populated. Comoros’ Human Development Index value for 2018 was 0.538, which puts the country in the low human development category, positioning it at 156 out of 189 countries and territories.[5] Gross national income (GNI) per capita decreased by approximately 5.8 percent between 1990 and 2018.[6] The high levels of poverty, political uncertainty and developmental challenges have restricted the development of the housing sector, including social housing. As a result, Comoros receives a considerable amount of foreign aid, including for housing.
Comoros officially announced the first COVID–19 case on 30 April 2020. To contain the spread of the pandemic, the government doubled down on prior measures such as closing schools, suspending international commercial flights from 23 March, and observing the curfew across the national territory declared on 25 April. However, the government did not place people under lockdown.[7] The Global Health Security Index ranked Comoros 160 among 195 countries worldwide and 39 in Africa. With a score of 27.2 out of 100, it is among the least prepared countries to face the pandemic.[8]
In 2020, in a context of the global health crisis caused by COVID-19, the economy has been hit by declines in the tourism and travel, in diaspora remittances, and in foreign direct investment.[9] Growth should rebound in 2021 to 3.5 percent but will depend heavily on improvements in the global economy. The budget deficit is expected to widen by 1.0 percent to 1.8 percent due to a moderate decline in revenues.[10]
[1] United Nations Population Division (2020). World Population Prospects: 2019 Revision. http://api.worldbank.org/v2/en/indicator/SP.POP.TOTL?downloadformat=excel (Accessed 9 August 2020).
[2] United Nations Population Division (2020). World Urbanization Prospects: 2018 Revision. http://api.worldbank.org/v2/en/indicator/SP.URB.TOTL.IN.ZS?downloadformat=excel (Accessed 9 August 2020).
[3] Central Bank of the Comoros (2020) Economic Outlook for 2019. http://www.banque-comores.km/DOCUMENTS/Note_de_conjoncture_2019.pdf (Accessed 9 August 2020). Pg. 1.
[4] United Nations Population Division (2020). World Population Prospects. http://api.worldbank.org/v2/en/indicator/EN.POP.DNST?downloadformat=excel (Accessed 9 August 2020).
[5] United Nations Development Programme (2019) Human Development Report 2019. http://hdr.undp.org/sites/all/themes/hdr_theme/country-notes/COM.pdf (Accessed 15 August 2020). Pg. 2.
[6] United Nations Development Programme (2019) Human Development Report 2019. http://hdr.undp.org/sites/all/themes/hdr_theme/country-notes/COM.pdf (Accessed 15 August 2020). Pg. 3.
[7] African Development Bank (2020). African Economic Outlook 2020 — Supplement https://www.afdb.org/en/documents/african-economic-outlook-2020-supplement (Accessed 15 August 2020). Pg. 65.
[8] African Development Bank (2020). African Economic Outlook 2020 — Supplement https://www.afdb.org/en/documents/african-economic-outlook-2020-supplement (Accessed 15 August 2020). Pg. 65.
[9] African Development Bank (2020 African Economic Outlook 2020 – Supplement https://www.afdb.org/en/documents/african-economic-outlook-2020-supplement (Accessed 15 August 2020). Pg. 65.
[10] African Development Bank (2020) African Economic Outlook 2020 – Supplement https://www.afdb.org/en/documents/african-economic-outlook-2020-supplement (Accessed 15 August 2020). Pg. 65.
Access to Finance
The financial sector of the Comoros remains underdeveloped and relatively small. A total of 10 financial institutions are approved and supervised by the Central Bank of Comoros and these make up the local financial system:four banks, three decentralised financial institutions and three financial intermediaries.Banks include the Development Bank of Comoros (BDC),the Bank for Industry and Commerce (BIC-Comoros),Exim Bank -Comoros,and the Federal Bank of Commerce (BFC). Meck Union,the Union of Sanduk of Anjouan and the Sanduk Union of Mohéliare decentralised financial institutions thatoffer credit facilities especially in the rural regions. Financial intermediaries serve to carry out foreign exchange and money transfer operations;and these includethe Comoros Assistance International Company (CASi -SA), the National Post and Financial Services Company (SNPSF)and the Comorian House of Transfers and Values (MCTV-SA).Financial postal services are conducted through the National Post and Financial Services Company (SNPSF).
Comorians face several challenges with regard to accessing financial services. These includepoor financial infrastructure and distribution channels,high banking cost and transaction fees and low levels of financial literacy. In addition, the banking sector operates withinan unfavourable business environment and the country’s judicial system remains weak.Thus banks are unable to enforce claims against delinquent debtors. The solvency of Comoros banking system is fragile as the level of non-performing loans (NPLs) is relatively high, being 24% in 2019. Furthermore, weak asset quality(including houses) impedes access to credit and restricts lending activities due to the heightened risk aversion. In 2019, the financial system’s capital adequacy ratio (CAR) stood at 24.7% of risk-weighted assets (RWA), significantly higher than the regulatory minimum of 10%. However, several banks in Comoros have low capital buffers above the minimum capital. In particular, the capital needs of the under capitalized banks account for 0.9% of the GDP.
The unprecedented effects of COVID-19 in Comoroshave undoubtedly made 2020/21 extremely difficult, both in terms of health and economic activity.The financial sectorin particular has experienced liquidity problems due to increased bank withdrawal transactions compared to the declining bank deposit transactions,following the economic slowdown. Trade activities fell by 13.6% compared to the last quarter of 2020 due to the decline in import of goods by 15.8%,even though export of goods increased by 22.7%.
The financial and banking system assets of the makes up 27% of the GDP. The level of financial inclusion is still in its infancy, as there is limited access and use of financial products by households. In 2019, the number of customers who borrowed from banks (per 1,000 adults) was 14.62 compared to the Sub-Saharan African average of 37.6. This demonstrates low access to finance in the Comoros, particularly amongst poor people in rural areas, who have low levels of education and expertise. People prefer to save money using informal financial systems such as hoarding or tontines (saving clubs), instead of banks, although primarily on a subsistence level. Banking penetration therefore remains low and only 22% of the total population have an account with a financial institution (including SNPSF),or usea mobile money service,compared to an average of 43% in Sub-Saharan Africa (SSA). The majority of individuals access credit through relatives, friends or loans granted by stores in the community. Limited access to financial services has increased reliance on social networks and personal connections for sourcing funds in low-income households. The limitations of credit access make ownership of an affordable housing extremely difficultby most Comorian households.
Banking activities predominantly occur in the cities including Moroni, Fomboni, Mutsamudu and Bambao.However, formal institutions have excludedmanyurban dwellers due to theirhigh costs and fees, with fees for accounts varying between 3% and 1.75% per annum. Loan interest rates often exceed the 14% ceiling set by the Ministry of Finance in 2009. Various factors such as inadequate security, unfavourable location, lack of power supply and communication infrastructure hinder the development of financial systems, particularly in remote zones.
COVID-19 has significantly reduced economic activity in the first quarter of 2021 following the tightening of public measures in the face of the resurgence of a second wave of infection.This, in addition to the impact of Cyclone Kenneth in 2020, has necessitated emergency fund financial support. In December 2020, the World Bank approved an CF4.25 billion (US$10 million) development policy financing (DPF) grant to protect the poor and vulnerable by supporting animmediate COVID-19 response program. This has assisted he economy to recoverfrom lower remittance inflows, a reduction in export earnings (especially tourism), and lower fiscal revenues amidst rising public expenditures. In March 2021, the World Bankapproved a second additional sum for social safety nets for CF2.55 billion(US$6 million).In July 2021, the World Bank approved a further CF8.5 billion (US$20 million) to support the purchase and distribution of vaccines. The Central Bank of Comoros has also implemented several monetary policy actions such as reducing reserve requirements to 10%,restructuring commercial loans and freezing interest rates on some loans so as to improve asset quality among the financial institutions.
Due to the small banking sector which is still developing in the Comoros, private lending for construction amongthe middle-and low-income groups remainslimited. Access to credit since 2015 has continued to fall due to the increased loan default rate brought by high non-performing loans (NPLs) and low profitability. With the economic slowdown since COVID-19, NPLs are expected to continue increasing. Two banks–the Development Bank of Comoros (BDC) and the Federal Bank of Commerce (BFC)-have been placed under temporary provisional administration by the Central Bank ofComoros.28The fragility of the financial sector remains a strong impediment to usage of financial services. Loans, particularly those granted in theprivate sector, have slightly risen from CF81.3 billion (US$1.96 million) at the end of December 2019 to CF81.7 billion (US$1.97 million) in March 2020.
According to World Bank’s Doing Business 2020 indicators, Comoros is ranked at 132, a downgrade from 124 in 2019. With respect to resolving insolvency, it is ranked at 168 out of 190 economies. The financial systems in Comoros are purely bank-based and capital markets are largely under developed as there is neither a stock exchange nor primary or secondary fixed-income markets. Government or commercial bondsalso do not exist. The state accesses credit from domestic commercial banks and the central bank controls liquidity levels through the regulation of minimum reserve requirements. The main source of inflow for the Comorian economy is remittances, which increased during the COVID-19 period. This is linked to migrants’ altruism and ability to draw on savings to assist family members amid the pandemic. Remittances in Comoros increased to CF79.22 million(US$1.89 million)in December 2020 from CF79.19 million (US$1.86 million) in November of 2020.
[1] Central Bank of the Comoros (2020). Credit institutions http://www.banque-comores.km/index.php?page=etablissements-de-credit (Accessed 16 August 2020).
[2] Central Bank of the Comoros (2020). Financial intermediaries http://www.banque-comores.km/index.php?page=intermediaires-financiers (Accessed 16 August 2020).
[3] International Monetary Fund (2020). IMF Country Report No. 20/198. https://www.imf.org/~/media/Files/Publications/CR/2020/English/1COMEA2020002.ashx (Accessed 16 August 2020). Pg. 6.
[4] International Monetary Fund (2020). IMF Country Report No. 20/198. https://www.imf.org/~/media/Files/Publications/CR/2020/English/1COMEA2020002.ashx (Accessed 16 August 2020). Pg. 9.
[5] 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. 16
[6] Central Bank of the Comoros (2019) Quarterly Bulletin: 1st Quarter 2019. http://www.banque-comores.km/DOCUMENTS/Bulletin_BCC_n22_mars_2019.pdf (Accessed 16 August 2020). Pg. 15.
[7] Central Bank of the Comoros (2019) Quarterly Bulletin: 1st Quarter 2019. http://www.banque-comores.km/DOCUMENTS/Bulletin_BCC_n22_mars_2019.pdf (Accessed 16 August 2020). Pg. 15.
[8] Central Bank of the Comoros (2019) Quarterly Bulletin: 1st Quarter 2019. http://www.banque-comores.km/DOCUMENTS/Bulletin_BCC_n22_mars_2019.pdf (Accessed 16 August 2020). Pg. 16.
[9] Central Bank of the Comoros (2019) Quarterly Bulletin: 1st Quarter 2019. http://www.banque-comores.km/DOCUMENTS/Bulletin_BCC_n22_mars_2019.pdf (Accessed 16 August 2020). Pg. 17.
[10] Central Bank of the Comoros (2019) Quarterly Bulletin: 1st Quarter 2019. http://www.banque-comores.km/DOCUMENTS/Bulletin_BCC_n22_mars_2019.pdf (Accessed 16 August 2020). Pg. 17.
[11]Central Bank of the Comoros (2019) Quarterly Bulletin: 1st Quarter 2019. http://www.banque-comores.km/DOCUMENTS/Bulletin_BCC_n22_mars_2019.pdf (Accessed 16 August 2020). Pg. 18.
[12]Central Bank of the Comoros (2019) Quarterly Bulletin: 1st Quarter 2019. http://www.banque-comores.km/DOCUMENTS/Bulletin_BCC_n22_mars_2019.pdf (Accessed 16 August 2020). Pg. 20.
[13]Central Bank of the Comoros (2019) Quarterly Bulletin: 1st Quarter 2019. http://www.banque-comores.km/DOCUMENTS/Bulletin_BCC_n22_mars_2019.pdf (Accessed 16 August 2020). Pg. 19.
[14] International Monetary Fund (2018). IMF Country Report No 18/189 Union of the Comoros 2018 Article IV Consultation. http://www.imf.org/~/media/Files/Publications/CR/2018/cr18189.ashx (Accessed 16 August 2020).
[15]International Monetary Fund (2020). Catastrophe Containment and Relief Trust— Approval of Grant Assistance for Debt Service Relief. https://www.imf.org/~/media/Files/Publications/PP/2020/English/PPEA2020022.ashx (Accessed 16 August 2020). Pg. 45.
[16] 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).
[17] 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. 9.
[18] 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.
Affordability
For the past 20 years, urban housing remains largely inaccessible for most Comorians because public funding is only available for public servants. Since independence in 1975, the government has not designed a specific policy or program to address housing or improve settlements. Economic and social factors such as population growth, recurring socio-politico-economic crises, and the global financial crises have made housing finance largely dependent on the private sector. The Central Bank of Comoros is keen to enhance the level of access to credit and financial services for those institutions that offer housing loans for smaller amounts. Various recommendations have been put forward in order to create financial incentives and to mobilise public-private partnerships. In 2017, loans for non-productive purposes made up most of the finance aid, with housing only making up some 2.5% of the lending industry, with construction at 5.6%.
[1] International Monetary Fund (June 2018). IMF Country Report No. 18/190. https://www.imf.org/~/media/Files/Publications/CR/2018/cr18190.ashx (Accessed 16 August 2020). Pg. 39.
Housing Supply
Real estate development in Comoros is extremely limited and most houses are self-built. There have been several housing projects undertaken by external constructors, including Turkish and Iranian developers. Karmod (the Turkish developer) has built prefabricated houses of 42m2 under a United Nations (UN) funded project using mobile container technology. In 2014, an Iranian developer proposed to construct 5,000 social housing units on the three main islands as a follow-up to this program.
There are five basic housing structure types: adobe, concrete, unrefined masonry, refined masonry(plastered), and wood. Approximately 90% of the houses are privately-owned, 3% are rented, and 3% are occupied rent-free. The houses vary from two-room structures covered with palm leaves to multilevel buildings made of stone and coral. The average size of a residential unit is 30m2.In 2015, more than 70%of the urban population lived with very poor sanitation. However, in 2020 it was reported that authorities had made progress with several policy reforms to strengthen service provision, including electricity. Around 98% of the population now have access to improved sanitation and potable water.
In 2017, 6.2% of households in rural areas lived in poorly constructed buildings that had either leaf walls or thatched roofs. Alternative more durable building materials have been investigated. This is because buildings made of corrugated orgalvanized metal sheetsare less resistant to cyclonic winds or seismic activity, making households vulnerable to potential adverse natural events, such as Cyclone Kenneth in 2019.
[1] United Nations Office for Disaster Risk Reduction (2015) Review of Comoros. https://www.preventionweb.net/files/43527_4.reviewofcomoros1.pdf (Accessed 16 August 2020). Pg. 78.
[2] Ottenheimer, M. and Ottenheimer, H.J. Comoros. Britannica Online Encyclopaedia, www.britannica.com/place/Comoros. (Accessed 16 August 2020).
[3] Habitat III (2016). Country Report: Union of Comoros. Government of Comoros, Vice President in charge of the Ministry of Territory Development, of Infrastructures, Urbanization, and Housing. http://habitat3.org/wp-content/uploads/National-Reports-Comoros-English.pdf (Accessed 16 August 2020).
[4] Government of Comoros (March 2013). Enquête Démographique et de Santé et à Indicateurs Multiples aux Comores EDSC-MICS 2012. https://dhsprogram.com/pubs/pdf/PR34/PR34.pdf (Accessed 16 August 2020).
[5] International Monetary Fund (2020). IMF Country Report No. 20/198. https://www.imf.org/~/media/Files/Publications/CR/2020/English/1COMEA2020002.ashx (Accessed 16 August 2020). Pg. 93.
[6] Ministère des Finances, du Budget et du Plan. Direction Nationale du Recensement (2007). Analyse des données du Recensement des Comores 2003. 14 volumes.
[7] Government General Secretariat (2014). Accelerated Growth and Sustainable Development Strategy 2015-2019. https://www.gouvernement.km/assets/img/documents/Comores%20SCA2D%202015_2019%20VF%20du%2030Nov2014.pdf (Accessed 16 August 2020). Pg. 27.
[8] Government General Secretariat (2018). 42 Years of Independence: Review and Prospects. https://www.gouvernement.km/assets/pdf/DOCUMENT-DEFINITIF-DES-ASSISES-12-fev.pdf (Accessed 16 August 2020). Pg. 164.
[9] Government General Secretariat (2018). Five-Year Investment Plan: 2016-2021. https://www.gouvernement.km/assets/img/documents/PIQ2016-2021.pdf (Accessed 16 August 2020).
Property Markets
The demand for up-market properties in Comoros has grown, mainly due to the increased demand, created by foreign investment. The Economic Citizenship Act of 2008 enables foreigners who have made substantial investments within the country to register for Comorian nationality. Several other factors have also contributed to the growth in residential and commercial property ownership, including increased international aid and tourism, and good relationships with France, Saudi Arabia, and Persian Gulf allies.
In 2020, the price of the cheapest, newly built house by a formal developer or contractor in an urban area was CF30 000 000 (US$72 301). The typical monthly rental price for the cheapest, newly built house by a formal developer or contractor in an urban area was CF200 000 (US$482). The minimum size of a residential plot in urban areas is 100m2. Rentals for a three-bedroom apartment range between CF414930(US$1 000) and CF622395 (US$1 500) a month. These prices are largely unaffordable for Comorians. According to World Bank reports in 2014, 42.4% of the population, or approximately 316,000 people were living below the poverty line of CF25341(US$ 59.5)per person per month.
According to the World Bank Doing Business 2020 indicators, Comoros is ranked at 113 on ease of registering property, a slight improvement compared with 114 in 2019. The process of registering business entails four procedures and it takes approximately 30 business days to complete. The total cost of registering is approximately 7.6% of the property value. With regard to construction permits, Comoros is ranked 101 and the process takes 11 procedures and a waiting period of approximately 107 days before building can commence.
[1] World Bank (2018). Latest Report on Poverty in Comoros. https://www.worldbank.org/en/country/comoros/publication/latest-report-on-poverty-in-the-comoros (Accessed 16 August 2020).
[2] Yahaya, A. I2a Immobilier SARL. http://www.i2a-immobilier.com/ (Accessed 5 September 2020).
[3] Aida Yahaya. I2a Immobilier SARL. http://www.i2a-immobilier.com/ (Accessed 5 September 2020).
[4] Aida Yahaya. I2a Immobilier SARL. http://www.i2a-immobilier.com/ (Accessed 5 September 2020).
Policy and Regulations
The administration of housing and other related issues in Comoros is managed by the Ministry of Energy, Agriculture, Fisheries, Environment, Regional Planning, and Urban Planning. Previously, housing administration was placed under the Ministry of Territorial Management, Urbanisation, Housing, and Energy. The supply of energy at an affordable cost and accessible to all is one of the main government priorities. This is because energy is considered indispensable for economic development and for the supply of water, hospitals, schools, housing, and transport. The current institutional setup for urban land management and policy legislation involves the ministries responsible for finance, development planning, and housing, as well as local municipalities.
Comoros intends to continue its efforts to promote access to financial services and reinforce financial stability by addressing credit risk concerns. To ensure greater financial inclusion, the government has made strides in adopting a revised Banking Law in 2013, as well as additional central Bank regulations in 2015, to strengthen the overall framework for greater internal control and management. In 2016, inspections at the Central Bank of Comoros revealed shortcomings in governance and indications that financial credit was extended to staff members.
The government of Comoros together with international organisations such as International Monetary Fund, The World Bank, and African Development Bank, have engaged in various initiatives and reforms to bolster financial development. Financial systems were strengthened and continue to improve amid prevailing challenges. The entry of foreign banks encouraged the national investment code of 2007 to be reformed, and a National Agency for Investment Promotion was established. In February 2021, the government of Comoros and the Central Bank launched the Financial Sector Development Support Project (PADSF P166193), geared towards promoting financial inclusion. This Project is financed by the World Bank. The Project contributes to the development of digital payments, a reduction of interbank transaction times, and a general improvement in the management of risk and payment protection to shield customers and banks from bad debtors.
Opportunities
Comoros is strategically located, and the fishing industry has great potential for growth, despite being commercially underdeveloped.
The unmet demand for housing in Comoros presents itself as an opportunity. However, there are various impediments to market growth. There are opportunities for harnessing domestic resources and improving the corporate governance of state-owned enterprises. In addition, given the large flow of migrant remittances to Comoros, further development of financial systems should be pursued, as well as measures to improve the business environment. All these measures will lead to inclusive growth and economic development within the country, and to greater investment into housing.
The government should incentivise inclusive growth by strengthening the financial sector to enable the greater provision of credit (and limit risks) and implementing a targeted growth strategy. This will enhance mortgage demand by providing competitive lending rates to investors. Measures to curb the high level of unemployment, especially amongst young people, can significantly transform the economic performance and necessitate housing demand. Employment opportunities within the formal and informal sector can enhance the level of financial inclusion and lead to easier access to credit for housing facilities. Urban planning and management can streamline the housing sector in Comoros, particularly on the coastline, since it is highly exposed to natural and climate-related disaster risks.
[1]International Monetary Fund (2020). IMF Country Report No. 20/198. https://www.imf.org/~/media/Files/Publications/CR/2020/English/1COMEA2020002.ashx (Accessed 16 August 2020). Pg. 4.
[2]International Monetary Fund (2020). IMF Country Report No. 20/198. https://www.imf.org/~/media/Files/Publications/CR/2020/English/1COMEA2020002.ashx (Accessed 16 August 2020). Pg. 5.
Availability of data on housing finance
The Comoros Ministry of Agriculture, Fisheries, Environment, Territory, and Urban Planning has the responsibility of overall administration of housing and related issues and is meant to publish this information. However, its website has been under construction and can not be accessed. Given the limited access to information on housing in the country, the few real estate agencies that operate in the country provide information on the state of the housing sector in the country. The real estate agencies are based in the major town centers of Moroni, Fomboni, and Mutsamudu.
Information on the financial sector is published on an annual basis by the Central Bank of Comoros. In addition, the Central Bank of Comoros publishes a quarterly bulletin on its website composed of three parts: quantitative indicators relating to monetary policy, banking and financial development, the results of business surveys carried out by the banks, and a topical news item. central Bank’s website is in French.
Urban Informality
The estimated population as of 1 July 2021 was 888 451, with 29.4% of the population living in urban areas making Comoros one of the least urbanised populations in Africa. While the total population is expected to grow at 2.07%, the urban population is expected to grow at a higher rate of 2.97%. Comoros is densely populated with approximately 467 inhabitants km2 and a young population with a median age of 20.4 years.
More than 70% of the urban population live in informal settlements in poor conditions. The quality of construction materials varies significantly with 10% of residential buildings constructed using corrugated or galvanized metal sheets. In 2020 it was reported that Comoros had made significant progress with several policy reforms to strengthen service provision, including electricity.
Urban planning and management strategies are being set to make housing in Comoros more durable, particularly on the coastline, since these buildings are most exposed to climate-related risks.
Websites
Central Bank of the Comoros: www.banque-comores.km/
African Development Bank Group: www.afdb.org
The National Institute of Statistics and Economic and Demographic Studies: www. indeed.km/International Monetary Fund: https://www.imf.org
World Bank Group: https://www.worldbank.org