Housing Finance in Rwanda

Overview

Rwanda is a landlocked country in the East African region with a population of 12.9 million people. Most of the population still live in rural areas with an estimated 18% (2.3 million people) living in urban areas. With a current annual growth rate of 2.4%, the country’s population is expected to increase to approximately 22.1 million people by 2050.^[1] Rwanda’s National Land Use Development Master Plan (NLUDMP) anticipates a housing need of 5.5 million units by 2050, or an annual delivery of 150 000 units. These housing units would be needed in rural areas, where the bulk of the population still lives,  in the country’s capital, Kigali, and in key secondary towns such as Musanze, Nyagatare, Rubavu, Muhanga, Rusizi and Huye.^[2] Housing supply will also have to support dynamic modes of local demand trends, whereby, for instance, 75% of homeowning residents built their own homes. Most people still live in self-built, informal or backyard dwellings in rural or unplanned urban settlements, with median incomes ranging from FRw55 000 (US$53.80) to FRw133 000 (US$130).[3] This submarket would form the bulk of future housing demand, highlighting the need for affordable housing in the country.

Rwanda’s economy has been on an improved trajectory in 2022, compared to 2021. Real gross domestic product (GDP) growth was 7.9% in the first quarter of 2022 (compared to 3.5% in the same quarter in 2021) mainly due to a strong performance in the industry and service sectors, including the real estate sector which grew by 4.5%.^[4] The lending rate rose to 16.31% in the second quarter of 2022, from 16% in the same period in 2021. This pointed to an increase in the share of short-term and medium-term loans, which were priced at high rates compared to long-term loans. The interbank lending rate in the period was 6.54%.

In the quarter ending June 2022, the Rwandan franc has, however, remained weak compared to the US dollar, with a year-on-year depreciation of 3.78% in June 2022.^[5] Inflation increased 12.6% year-on-year, driven mainly by increases in the prices of food, beverages, housing, water and electricity, gas, and other fuels.^[6] These increases are reflective of shifts in global and regional commodity prices, which have been exacerbated by the war between Russia and Ukraine who are main exporters of oil, gas, fertilisers, metals, cereals, and sunflower-seed oils. The National Bank of Rwanda (Rwanda’s central bank) increased the Central Bank Rate – elsewhere known as interest rate – from 5% to 6%, with the aim of reducing inflationary pressures and preserving the purchasing power of consumers.[7]

Rwanda’s National Environment and Climate Change Policy recognises the effects of climate change and environmental issues on the country’s sustainable development trajectory.^[8]  Despite having low rates of carbon emissions, Rwanda is experiencing the effects of climate change and climate variability. Average temperatures have increased, along with  the frequency and severity of natural disasters such as drought, floods, and landslides.[9] These have led to a loss of life, crop and livestock losses, health risks, damage to infrastructure, and reduced land availability that impacts food security and export earnings. Rwanda’s Ministry of Disaster Management and Refugee Affairs estimates that floods and droughts have affected at least two million people in the country.[10] Rwanda’s economy is also strongly reliant on rain-fed agriculture and tourism due to its rich biodiversity and natural habitat.

Existing policy has recognised the need to safeguard these ecosystem services to ensure food, water, and energy security, and to support future socio-economic development.^[11] Furthermore, recognising ongoing urbanisation trends, the 2019 National Environment and Climate change Policy also noted the risks that poorly planned and managed rural and urban development will have on the environment, and ultimately, economic growth. Additional risks are posed by a lack of low-carbon materials for housing and green infrastructure development, inadequate solid and liquid waste treatment, and insufficient treatment of industrial effluents and storm-water drainage systems.^[12] The country’s Green Growth and Climate Resilience Strategy (GGCRS) outlined a series of programmes for achieving a climate-resilient, low-carbon economy by 2050. The National Land Use and Development Master Plan, the National Land Tenure Regularisation Programme, and the Kigali City Masterplan are evidence of the implementation of these programmes.^[13] The Rwanda National Disaster Risk Management Plan, enacted in 2013, establishes systems of preparedness, response, and recovery in relation to natural and man-made disasters and human-induced emergencies.^[14] The plan is implemented under the leadership of Rwanda’s Ministry in Charge of Emergency Management (formerly known as the Ministry of Disaster Management and Refugee Affairs).^[15]

^[1] United Nations (2018). Department of Economic and Social Affairs, Population Dynamics. World Urbanisation Prospects 2018 Revision. https://population.un.org/wup/Country-Profiles/ (Accessed 1 August 2022).

[2] Access to Finance Rwanda (2021). Affordable Housing in Rwanda – 3. Demand-side analysis

November 2021. https://afr.rw/wp-content/uploads/2022/01/3.-Affordable-Housing-in-Rwanda-Demand-side-analysis-min.pdf (Accessed 8 October 2022). Pg. 10.

[3]Ibid. Pg. 12

^[4] National Bank of Rwanda (2022). Monetary Policy Report. August 2022. https://www.bnr.rw/monetary-policy/monetary-policy-reports/ (Accessed 5 August 2022). Pg. 21.

^[5] National Bank of Rwanda (2022). Monetary Policy Report. August 2022. https://www.bnr.rw/monetary-policy/monetary-policy-reports/ (Accessed 5 August 2022). Pg. 20.

^[6] National Institute of Statistics in Rwanda (2022). Consumer Price Index, May 2022.10 June 2022. https://statistics.gov.rw/publication/1815 (Accessed 5 August 2022).

[7] Kenton, W. (2021). Bank Rate: Definition, How It Works, Types, and Example. 30 August 2021 https://www.investopedia.com/terms/b/bankrate.asp (Accessed 8 October 2022).

^[8] Republic of Rwanda (2011). Green Growth and Climate Resilience National Strategy for Climate Change and Low Carbon Development. Rwanda Environment Management Authority. November 2011. https://www.rema.gov.rw/rema_doc/RGG&CRS%202011/Rwanda%20Green%20Growth%20Strategy%20FINAL%20high%20res.pdf (Accessed 2 August 2022).

[9] MIDIMAR (2015). The National Risk Atlas of Rwanda. Ministry of Disaster Management and Refugee Affairs. https://www.gfdrr.org/sites/default/files/publication/National_Risk_Atlas_of_Rwanda_01.pdf  (Accessed 8 October 2022).

[10] Ibid.

^[11] Republic of Rwanda (2011). Green Growth and Climate Resilience National Strategy for Climate Change and Low Carbon Development. Rwanda Environment Management Authority. November 2011. https://www.rema.gov.rw/rema_doc/RGG&CRS%202011/Rwanda%20Green%20Growth%20Strategy%20FINAL%20high%20res.pdf (Accessed 2 August 2022).

^[12] Republic of Rwanda (2011). Green Growth and Climate Resilience National Strategy for Climate Change and Low Carbon Development. Rwanda Environment Management Authority. November 2011. https://www.rema.gov.rw/rema_doc/RGG&CRS%202011/Rwanda%20Green%20Growth%20Strategy%20FINAL%20high%20res.pdf (Accessed 2 August 2022). Pg. 21.

^[13]Ibid. Pg. 12.

^[14] MIDMAR (2013). National Disaster Risk Management Plan. September 2013. Ministry of Disaster Management and Refugee Affairs . http://extwprlegs1.fao.org/docs/pdf/rwa168359.pdf (Accessed 2 August 2022). Pg. 5

^[15]MINEMA. Ministry in charge of Emergency Management. About MINEMA. https://www.minema.gov.rw/about (Accessed 2 August 2022).

Access to Finance

Financial inclusion in Rwanda is relatively high, with approximately 93% of people having access to both financial products and services. There has been an increase in credit consumption and borrowing, with approximately 76% of adults having some form of borrowing or credit.  Banks, Umurenge Saving and Credit Cooperative Society’s (SACCO) Mobile Banking, and Microfinance Institutions (MFI) are some of the main sources of credit. Many adults, however, still rely on borrowing from informal sources such as savings groups, shops, friends and family.^[1]

Women are not restricted from accessing credit or purchasing property in Rwanda. The gender gap in access and uptake of financial services in Rwanda is marginal with 74% of women accessing and using financial services, compared to 81% for men. The share of women using banking services also increased from 24% in 2016 to 34% in 2020. There is, however, a recognition of the fact that housing finance remains limited in Rwanda with few households able to access formal mortgage finance offered by financial institutions. In December 2021, the value of banks’ outstanding loans attributed to residential property mortgages was FRw472.4 billion (US$462 million), a 25.7% change from the previous year.^[2]

The Rwanda Housing Finance Project (RHFP) was established by the Government of Rwanda with finance from the World Bank. The intention is to expand support for the mortgage finance industry and support capital markets development in the country. The RHFP is implemented by the Development Bank of Rwanda (BRD), which provides lending to financial institutions at an interest rate of 6%, enabling them to finance eligible beneficiaries at a maximum interest rate of 11% for up to 20 years.^[3] This facility has enabled participating financial institutions in the country to provide mortgage finance to beneficiaries at more favourable terms.^[4] The BRD plays a leading role in coordinating the implementing of Rwanda’s housing finance project through the administration of the RHFP.[5]

Rwanda has a robust financial sector which includes banks, MFIs and pension funds. There are 16 banks which comprise of 11 commercial banks, three microfinance banks, one development bank, and one cooperative bank. The MFI sector comprises 416 Umurenge SACCOs, 19 public limited companies and 22 other SACCOs. There are 12 private and one public pension funds.^[6]  MFIs are a key driver for financial inclusion in Rwanda with more than 4.9 million accountholders nationally in 2022^[7] Loans borrowed from MFIs are used for business, entrepreneurial, and household activities including building or improving dwellings, buying land, or dwellings. Women form a significant share of loan holders in MFIs, holding nearly half of the loans in the MFI portfolios.^[8]

All major commercial banks and lenders in Rwanda offer a range of residential mortgage loans with lending interest rates between 11% and 16%, and repayment periods of up to 20 years. Although the lending rate increased from 16% to 16.31% in 2022, the National Bank of Rwanda still notes credit risk as a significant threat to banking sector stability.^[9]

Financial inclusion data collected by the National Bank of Rwanda is disaggregated by region and gender.^[10] The availability of granular and disaggregated data has been helpful for lenders and policymakers, and has possibilities to deepen financial inclusion for both men and women. Policymakers, for instance, could formulate policies and incentives based on a better understanding of the lending needs of women in the country.^[11] On the lending side, there is already evidence of lenders and MFIs formulating women-targeted financial products, and products particularly targeted at small and medium size entrepreneurs. The Zamuka Mugore loan provided by the Bank of Kigali, which allows women to save as individuals or groups at competitive interest rates and access credit facilities of up to FRw1 million (US$978) with no collateral, is a good example of innovative lending products that can be facilitated through increased access to gender-disaggregated information.^[12]

As the chief regulator and supervisor of Rwanda’s financial markets, the National Bank of Rwanda collects and maintains information and data on credit in the country. Financial institutions also report credit information on licensed private credit bureaus.^[13] As part of the affordable housing drive, several finance institutions in Rwanda have also developed construction and supply-side loans that finance up to 70% of building project costs. Examples include the home improvement and house construction loans from the Bank of Kigali,^[14] the estate development loan from the Kenya Commercial Bank Rwanda,^[15] and NCBA’s Real Estate Finance Loan.^[16]

^[1] Access to Finance Rwanda (2020). FinScope Rwanda Consumer Survey Report 2020. https://www.statistics.gov.rw/publication/finscope-rwanda-2020 (Accessed 3 August 2022). Pg. 47

^[2] National Bank of Rwanda (2022).Monetary Policy and Financial Stability Statement. September 2022. https://www.bnr.rw/news-publications/publications/monetary-policy-financial-stability-statement/ (Accessed 1 August 2022). Pg. 66.

^[3] Development Bank of Rwanda. Housing priority sector. (Accessed 1 August 2022).

^[4] Bank of Kigali (2021). Integrated Banking – Annual Integrated Report 2021. https://bk.rw/files/annual-report/bk-group-annual-integrated-report-2021 (Accessed 1 August 2022). Pg. 58.

[5] Mwai, C. (2016). BRD, Shelter-Afrique reassure on Rugarama housing Project.21 Nov 2016. The New Times. https://www.newtimes.co.rw/article/135578/News/brd-shelter-afrique-reassure-on-rugarama-housing-project (Accessed 8 October 2022).

^[6] National Bank of Rwanda (2021). Annual Report 2020-2021. https://www.bnr.rw/index.php?id=82 (Accessed 1 August 2022). Pg 83.

^[7] National Bank of Rwanda (2022). MFIs Financial Inclusion Data March 2022. https://www.bnr.rw/financial-inclusion/financial-inclusion-data/ (Accessed 1 August 2022).

^[8] Access to Finance Rwanda (2020) Impact of COVID-19 to the microfinance sector in Rwanda: Rapid survey and assessment. May 2020. https://afr.rw/IMG/pdf/focus_note_-_covid-19_survey_12.06.20_.pdf (Accessed 1 August 2020).

^[9] National Bank of Rwanda (2021). National Bank of Rwanda Annual Report 2020-2021. https://www.bnr.rw/index.php?id=82 (Accessed 1 August 2022). Pg 87.

^[10] National Bank of Rwanda (2022). MFIs Financial Inclusion Data March 2022. https://www.bnr.rw/index.php?id=143 (Accessed 2 August 2022).

^[11] Data2x (2019). Data Driving Women’s Financial Inclusion: Rwanda’s Experience. September 2019. https://data2x.org/wp-content/uploads/2019/09/WFID-Rwanda-Case-Study-v14-digital.pdf Pg 4.

^[12] Bank of Kigali (2022). New Loan Plan. https://bk.rw/media/new-loan-plan (accessed 8 October 2022).

^[13] National Bank of Rwanda (2022). Credit Reporting System. https://www.bnr.rw/laws-and-regulations/credit-reporting-system/ (Accessed 1 August 2022).

^[14] Bank of Kigali (2022). House Construction. https://bk.rw/personal/loans/house-construction. (Accessed 2 August 2022).

^[15] KCB Group Rwanda (2022). Estate Development Mortgages. https://rw.kcbgroup.com/for-you/get-a-loan-for-you-rw/mortgages/estate-development-loans (Accessed 2 August 2022).

^[16] NCBA Rwanda (2022). Real Estate Finance Loan. https://rw.ncbagroup.com/loan/real-estate-finance-loan/ (Accessed 2 August 2022).

Affordability

The 2016/17 Integrated Living Conditions survey reported a decline in the overall poverty rate to 36.7% from 38.1% in the 2013/14 survey. The report also noted a drop in the poverty gap rate within this period, which indicates a relative improvement in the living standards of poor households.^[1] Rwanda has a working age population of approximately 7.87 million with a 54.5% labour participation rate. Rwanda’s unemployment rate declined from 23.8% in November 2021 to 16.5% in February 2022. The rate of unemployment was higher among women and youth compared to men, and in urban areas when compared to rural areas.^[2]. Median incomes in rural areas were FRw26 000 (US$25) , compared to a median income of FRw78 000 (US$76) in Kigali, as an example.^[3] The informal sector employs a large share of the population, representing more than 86% of the employed population.^[4]

The bulk of Rwanda’s population live in rural areas. The country’s population is growing by 61 000 households per annum, of which 25 000 are in urban areas and 36 600 in rural areas. At current population growth rates, Rwanda’s NLUDMP anticipates that 5.5 million dwelling units will be needed by 2050, or an annual delivery of 150 000 dwelling units. Home ownership rates are high across both rural and urban areas, with only 28% of urban residents being renters or tenants.

Data from the Integrated Household Living Conditions Survey indicates that households spend FRw6 000 (US$6) on rent at the lowest category, and FRw58 000 (US$57) at the high-end category of employees in the public sector. It also presented an even balance between households that rent, and those who own their own homes across all submarkets, though the housing conditions in the low income end of market were still of varying levels of poor quality.^[5] The typical rental costs for a developer-built apartment ranged from FRw413 600 (US$405) to FRw723 800 (US$708) a month. A newly built house by local developers was priced at FRw60 million (US$58 691). At current mortgage terms, this unit would be unaffordable for many households.

^[1] National Institute of Statistics of Rwanda (2018).The Fifth Integrated Household Living Conditions Survey EICV5

2016/17 – Rwanda Poverty Panel Report. December 2018. https://statistics.gov.rw/publication/eicv5poverty-panel-report (Accessed 1 August 2022).

^[2] National Institute of Statistics of Rwanda (2022). Labour Force Survey Trends, February 2022 (Q1) https://www.statistics.gov.rw/publication/1808 (Accessed 5 August 2022). Pg. 22.

^[3] National Institute of Statistics of Rwanda (2018). EICV5 Thematic Report Economic activity thematic report. https://www.statistics.gov.rw/publication/eicv5thematic-reporteconomic-activity-thematic-reportpdf (Accessed 2 August 2022). Pg. 30.

^[4] National Institute of Statistics of Rwanda (2021) Labour Force Survey Annual Report 2021. https://www.statistics.gov.rw/publication/labour-force-survey-annual-report-2021 (Accessed 10 August 2022). Pg. 108.

^[5] Access to Finance Rwanda (2021). Scoping Rwanda’s Affordable Housing Sector and its Financing. 5. Housing Sub-Markets. November 2021. https://afr.rw/wp-content/uploads/2022/01/5.%20Affordable%20Housing%20in%20Rwanda%20-%20Housing%20Submarkets-min.pdf (Accessed 2 August 2022)..

Housing Supply

Rwandan households live in diverse kinds of housing including formal, developer-built, and informal dwellings built by individual households. 82% of all households in the country and 9% in urban areas live in sub-standard, informal, or unplanned housing.^[1] Kigali’s master plan^[2] regulates the smallest residential plot size at 100m²  75% of urban households who owned their home had built it themselves.

The formal housing development industry serves less than 1% of total households – and this may present an opportunity for market development. In recognising current and future urbanisation needs, the NLUDMP has outlined a series of interventions, including the managed growth of the country’s capital, Kigali, including planned expansion to satellite towns and the future development of other secondary nodes.^[3] The levels of basic infrastructure provision in urban areas were varied – 63% of urban households had access to piped water at the dwelling or yard level, and 29% had access to a flush toilet, with 13% sharing a toilet with another family. Eighty-eight percent of urban households had access to electricity.^[4]

Local building materials such as baked clay bricks (Impunyu) are dominant for local construction. Local experts have identified the potential for using local building materials and technologies such as shelled compressed earth for the development of durable and effective materials.^[5] However, cement is still being imported for construction. Cement imports have declined, relative to other construction materials, and this was attributed to the increase in domestic production of cement, and a reduction in domestic demand for cement in 2021.^[6] Rwanda’s construction and development industry is regulated by the Rwanda Housing Authority (RHA). There are, however, also industry bodies representing the various construction and housing-related disciplines, including the Institution of Engineers Rwanda, Rwanda Institute of Architects, Rwanda Urban Planning Institute, and the Rwanda Green Building Organisation (RWGBO).

Labour force statistics published at the end of 2021 indicated that the construction industry employs approximately 11% of the population. The informal sector employed more people than the formal sector. Out of 365 234 workers in construction, 359 546 were in informal employment, and 5 688 in the formal sector. More men were employed in the construction sector (86%) compared to women (14%).^[7] From the 2020 Ease of Doing Business indicators, Rwanda’s ranking in handling construction permits had improved from the 2019 measure. In 2020, it took 97 days to get a construction permit, with 15 procedures from application to completion. Application costs were at 11.4% of the house value.^[8]

[1] Access to Finance Rwanda (2021) Scoping Rwanda’s Affordable Housing Sector and its Financing. 5. Housing Sub-Markets. November 2021. https://afr.rw/wp-content/uploads/2022/01/5.%20Affordable%20Housing%20in%20Rwanda%20-%20Housing%20Submarkets-min.pdf (Accessed 2 August 2022) Pg. 12.

^[2] City of Kigali (2021). Kigali Master Plan 2050. Master Plan Report. https://bpmis.gov.rw/asset_uplds/kigali_master_plan/2_Kigali%20Master%20Plan_Main%20ReportLowRes.pdf (Accessed 8 October 2022).

^[3] Rwanda Land Management and Use Authority (2021). National Land-Use and Development Master Plan 2020-2050. https://rlma.rw/fileadmin/user_upload/National_Land_Use_DevMaster_Plan_2020-2050.pdf (Accessed 1 August 2022). Pg. 25

^[4] Access to Finance Rwanda (2021) ) Scoping Rwanda’s Affordable Housing Sector and its Financing. 5. Housing Sub-Markets7. November 2021 https://afr.rw/wp-content/uploads/2022/01/5.%20Affordable%20Housing%20in%20Rwanda%20-%20Housing%20Submarkets-min.pdf (Accessed 2 August 2022) Pg. 12.

^[5] Egenti, C. and Khatib, J. (2021) Affordable and Sustainable Housing in Rwanda. Sustainability 2021, 13, 4188. https://doi.org/10.3390/su13084188 (Accessed 12 August 2022).

^[6] National Bank of Rwanda (2022). Monetary Policy and Financial Stability Statement, 2022. https://www.bnr.rw/news-publications/publications/monetary-policy-financial-stability-statement/ (Accessed 1 August 2022). Pg.36.

^[7] National Institute of Statistics of Rwanda (2021) Labour Force Survey Annual Report 2021. Data Table 21. https://www.statistics.gov.rw/publication/labour-force-survey-annual-report-2021 (Accessed 10 August 2022).

^[8] The World Bank (2020). Ease of Doing Business in Rwanda 2020. .https://archive.doingbusiness.org/en/data/explorsseeconomies/rwanda#DB_dwcp (Accessed 10 August 2022).

Property Markets

Rwanda’s deeds registry is managed by the Rwanda Land Management Authority (RLMA) and is fully digitised. The analytics offer land and transaction information across the country. There are 11 623 620 land parcels in the country listed on the portal, with 454 226 of these in the city of Kigali.^[1]

Rwanda laws on land and succession secure the right for women and girls to inherit and access property on equal grounds with their male counterparts.^[2] Analysts have observed that these laws offer a fair and transparent process for property distribution, though cultural and social resistance could still hamper the full realisation of these laws.^[3] The Gender Monitoring Office 2019 report on the state of gender equality in Rwanda has, nonetheless, observed some improvement through an increased representation of women in land ownership and, through this, expanded access to finance and credit.^[4]

Rwanda was ranked 38th globally in the 2020 Ease of Doing business indicators, and second in Africa. In the registering property category, the country was ranked third with a score of 93 out of 100. This was due to the ease and efficiency in the processes and steps required to register property  through the RLMA. It took three different processes and seven days to register a commercial property in the country in 2020 at 0.1% cost of property value.^[5]

Developer-built housing serves a relatively small share of the urban market (2%). The average construction cost for houses in this category is FRw550 000/m² (US$538) to FRw920 000/m² (US$900), and units are priced at RFw100 million to FRw400 million (US$97 819 to US$391 274). There is a high demand for affordable housing and support in the low income end of the market with average incomes of FRw55 000 (US$53.80), where households mainly build their own homes incrementally using local or informal materials. Potential areas of support for this submarket include infrastructure and services, the establishment of local supply chains, and building materials support.^[6] Rwanda also has real estate agents ranging from formal to informal. The real estate sector employed 2 718 people in 2021, which represented 0.1% of the total working population. The Labour Force Survey also observed a 33.3% reduction in employment in this sector between 2019 and 2021.^[7]

^[1] Rwanda Land Management and Use Authority (2022). Rwanda Land Dashboard. https://rwandalanddashboard.rlma.rw/ (Accessed 2 August 2022).

^[2] Government of Rwanda (1999). Law n° 43/2013 of 16/06/2013 Governing Land in Rwanda. http://www.gmo.gov.rw/fileadmin/user_upload/laws%20and%20policies/Law_N43-2013_of_16-06-2013_governing_land_in_Rwanda.pdf (Accessed 2 August 2022).

^[3] Polavarapu, A. (2011). Procuring Meaningful Land Rights for the Women of Rwanda. https://scholarcommons.sc.edu/cgi/viewcontent.cgi?article=2133&context=law_facpub (Accessed 2 August 2022) Pg. 107.

^[4]  Gender Monitoring Office. The State of Gender Equality in Rwanda: From Transition to Transformation. https://www.gmo.gov.rw/index.php?id=19&id=19&tx_news_pi1%5Bday%5D=19&tx_news_pi1%5Bmonth%5D=8&tx_news_pi1%5Bnews%5D=203&tx_news_pi1%5Byear%5D=2019&cHash=ecb4fc7d1d0ebcf9d3c0fbc323167ee0 (Accessed 2 August 2022).

^[5] Ibid. Footnote 47.

^[6] Access to Finance Rwanda (2021) Scoping Rwanda’s Affordable Housing Sector and its Financing. 5. Housing Sub-Markets. November 2021. https://afr.rw/wp-content/uploads/2022/01/5.%20Affordable%20Housing%20in%20Rwanda%20-%20Housing%20Submarkets-min.pdf (Accessed 2 August 2022) Pg. 19.

^[7] National Institute of Statistics of Rwanda (2021) Labour Force Survey Annual Report 2021, Data Table 21. https://www.statistics.gov.rw/publication/labour-force-survey-annual-report-2021 (Accessed 10 August 2022). Pg. 19.

 

Policy and Legislation

Rwanda’s Vision 2050 frames the intention to achieve universal access to affordable and decent housing for all residents by 2050. ^[1]  This vision has been unpacked in the NLUDMP to shape Rwanda’s future urbanisation through the management of growth in the capital Kigali, supported decentralisation through planned expansion to secondary and satellite towns, and the management of rural settlement formation.^[2] The government created a long-term finance strategy through the RHFP that is already being implemented by local lenders and in affordable housing development projects such as the Rugarama Park and Kimisange and Kagarama Estates. Land banking projects for Ziniya, Ndera and Busanza are also being built through the RHFP. The country’s investment promotion laws also offer support for affordable housing developers, including full finance of service infrastructure in affordable housing projects or schemes; financing of construction materials for the use of shelter for vulnerable and homeless residents; and service infrastructure to and within the housing development project, including construction or supervision of construction.^[3]

A significant achievement has been the coordination of public sector data ecosystems and information management for housing and housing finance including the electronic mortgage database (eMRS), linked to the RLMA’s Land Administration Information System and the National Identification Agency system.. The RHA has also established an Affordable Housing Demand System (AHDS) known as “Iwanjye” as an online user demand-driven registration portal for applicants interested in accessing units. The RHA developed the building codes known as the Rwanda Green Building Minimum Compliance System in 2019.^[4] The Building Code encourages the use of indigenous knowledge, local solutions where possible in promoting the use of green construction and design practices, and offers incentives for investors in the green construction sector.^[5]

^[1] Republic of Rwanda (2020). Rwanda Vision 2050. Ministry of Finance and Economic Planning.  https://www.nirda.gov.rw/uploads/tx_dce/Vision_English_Version_2050_-31_Dec_2020.pdf (Accessed 2 August 2020).

^[2] Rwanda Land Management and Use Authority (2021). National Land-Use and Development Master Plan 2020-2050. https://rlma.rw/fileadmin/user_upload/National_Land_Use_DevMaster_Plan_2020-2050.pdf (Accessed 1 August 2022). Pg. 25

^[3] Republic of Rwanda (2021) Law n° 006/2021 of 05/02/2021 on Investment Promotion and Facilitation. https://rdb.rw/wp-content/uploads/2021/04/New-Investment-code-2021.pdf Pg. 32.

^[4] Republic of Rwanda (2019) The Rwanda Green Building Minimum Compliance System. 16 April 2019. https://gggi.org/wp-content/uploads/2019/07/Annex-3-Rwanda-Green-Building-Minimum-Compliance-System-REVISED.pdf (Accessed 2 August 2022).

^[5] Republic of Rwanda (2019) Rwanda Building Code. Official Gazette no.Special of 16/04/2019. http://197.243.22.137/rhanew/fileadmin/user_upload/documents/General_documents/Laws_And_Regulations/rwanda_building_code_2019.pdf (Accessed 2 August 2022). Pg. 154

Opportunities

The intentions outlined in Rwanda Vision 2050 for planned rural settlement formation and coordinated urbanisation and urban growth have created opportunities for affordable housing development across both urban and rural areas. Evidence of stimulation in the housing sector can be seen in the range of proactive and supportive policies and incentives, and the presence of long-term finance support through the housing finance project. The availability of synchronised information across various aspects of affordable housing – land, supply, finance, and spatial development, coupled with information on effective demand from the AHDS – could enable more targeted investment. There are also opportunities for supporting most households that construct their dwellings through the expansion and development of green technologies; affordable construction finance, and skills development and capacity building for the predominantly informal construction sector that is a key employer in this field.

Availability of Data on Housing Finance

Data on housing finance in Rwanda is collected by the National Institute of Statistics of Rwanda, the National Bank of Rwanda, the Rwanda Land Management and Land Use Authority, the Rwanda Housing Authority, and the Development Bank of Rwanda. These agencies together collect and disseminate information on demographics and labour trends, lending and housing finance trends, land and property transactions and registrations. Additional information is collected by the AHDS and the eMRS system.

A notable achievement has been the synchronisation of data and information related to housing and housing finance across public sector agencies and lenders. As an example, the eMRD database is also linked to the RLMA’s Land Administration Information System and the National Identification Agency system, which streamlines and expedites applicants’ identity proofing, thus expediting lending procedures. This data is also collected and disaggregated by gender, which enables innovation across both public and private sector housing agencies. A value addition to the housing finance sector will emerge through dissemination of analytics from the Iwanjye portal. Similarly, data for tracking climate issues affecting affordable housing could be publicly disseminated as part of the GGCRS.

Green Applications for Affordable Housing

The Rwanda Housing Authority developed the Rwanda Green Building Minimum Compliance System in 2019 in collaboration with local and international organisations. These guidelines were approved and published in 2019 as an Annexure to the country’s building code.^[1] The system is administered by the RHA as the central agency, and District One-Stop Centres at the building permitting level. The Green Building Minimum Compliance system offers technical guidelines and information on building materials, technologies and systems that would enhance sustainability, and is accessible in a digital format for ease of calculation.^[2] The local industry body organising green building professions is the RWGBO established as a partnership between the Rwanda Institute of Architects and RHA.

Rwanda’s electricity supply is mainly sourced from hydropower plants, thermal power plants (diesel and heavy fuel generators), methane gas, and solar energy via a combination of domestic and imported and regional shared power plants.^[3]

Rwanda has a green fund, the Rwanda National Fund for Environment (FONERWA), which has been recognised as an innovative climate financing mechanism globally and across Africa.^[4] The fund was established by the Rwanda government, and functions as a basket fund, generating and mobilising resources from a range of local and international sources, and supplying these funds in the form of grants, innovation investments, and credit lines for public and private projects geared towards resilience and building the green economy.[5] As of 2022, FONERWA has raised and committed FRw41.4 billion(US$40.5 million) to 44 projects.^[6]

^[1] Republic of Rwanda (2019) The Rwanda Green Building Minimum Compliance System. https://gggi.org/wp-content/uploads/2019/07/Annex-3-Rwanda-Green-Building-Minimum-Compliance-System-REVISED.pdf (Accessed 2 August 2022).

^[2] Ibid.

^[3] MININFRA. Energy Division. Hydro Power in Rwanda and Methane Gas in Rwanda. Ministry of Infrastructure. https://www.mininfra.gov.rw/digital-transformation-1-1#:~:text=The%20electricity%20supply%20of%20Rwanda,methane%20gas%20and%20solar%20energy. (Accessed 20 August 2022).

^[4] United Nations Climate Change (2022). Rwanda Green Fund – FONERWA. https://unfccc.int/climate-action/momentum-for-change/financing-for-climate-friendly-investment/rwanda-green-fund-fonerwa (Accessed 20 August 2022).

[5] Some of the partners listed in the FONERWA website include the Development Bank of Rwanda (BRD), World Bank, UNDP, SIDA, KFW, UKAID, the Green Climate Fund, and the Climate and Development Knowledge Network (CDKN).

^[6] Rwanda National Fund for Environment (2022) Rwanda Green Fund. April 2022. http://www.fonerwa.org/sites/default/files/2022-04/Rwanda%20Green%20Fund_Factsheet%20updated%20April%202022.pdf (Accessed 12 August 2022).

Websites

Access to Finance Rwanda www.afr.rw/

Development Bank of Rwanda www.brd.rw/brd/

Ministry in Charge of Emergency Management www.minema.gov.rw/

Ministry of Finance and Economic Planning www.minecofin.gov.rw/

Ministry of Infrastructure www.mininfra.gov.rw/

National Bank of Rwanda www.bnr.rw/home/

Rwanda Development Board www.rdb.rw/

Rwanda Green Building Organisation www.worldgbc.org/

Rwanda Housing Authority www.rha.gov.rw/

Rwanda Institute of Engineers www.engineersrwanda.rw/

Rwanda Land Dashboard www.rwandalanddashboard.rlma.rw/

Rwanda Land Management and Use Authority www.rlma.rw/

Rwanda National Fund for Environment – FONERWA www.fonerwa.org/