This review of Rwanda’s affordable housing sector and its financing was commissioned by Access to Finance Rwanda and undertaken by CAHF in partnership with 71point4 and local consultant Fatou Dieye. Eight reports are available. This is the executive summary of the work.
According to Rwanda’s FinScope 2020, there are 2.8 million households, of which less than a quarter (23%) live in urban areas). Just under 70% of urban households and more than 90% of rural households own their dwellings. Housing conditions for urban households in the secondary and satellite cities differ widely. According to FinScope, households in Kigali and Huye have better access to services, while households in Rusizi and Nyagatare have limited access to services and just 5% live in dwellings made from improved materials.
The main barrier keeping households out of the market enablement zone is affordability. Mortgage loans are unaffordable for most. Even smaller construction loans are beyond most households’ incomes. On the supply end, fewer than 5,000 dwelling units have been delivered through traditional developer-driven channels over a 10-year period, be they local or international with the delays in providing infrastructure subsidies having delayed or stalled major developer housing projects in the pipeline.
Finance is a key enabler in the housing ecosystem, and its application in support of affordable housing can seriously impact on the capacity of the sector to deliver. In addition, finance can influence the quality of delivery: nudging practitioners towards good practice and value, the acceptance of green standards and the prioritization of specific demand-side target markets and housing supply submarkets. Careful housing finance product design on both the demand (end-user) and supply (construction) side can leverage additional capacity in terms of; savings and income opportunities, digitization and landlordism.
This review of Rwanda’s affordable housing sector and its financing explored the overall institutional, policy and legislative environment for affordable housing, scoped the demand side, interrogated the capacity and activities of the supply side, and considered where finance could make a difference. This report sets out the findings of the project in summary, referencing a series of additional inputs that also shaped the conclusion and recommendations.Download pdf