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6000 to benefit from sh17b house project
Finance minister Maria Kiwanuka has launched a $6.6m (about sh17b) housing programme aimed at expanding microfinance services to build houses for about 6,000 disadvantaged families in Uganda.
The five-year project is financed by Habitat for Humanity International in partnership with the Toronto-based MasterCard Foundation. Under the partnership, the organisations intend to support microfinance institutions to start customer-friendly housing loan schemes for low income earners in Uganda, Kenya and Ghana.
A total of $102m (about sh262b) has been earmarked to benefit 17,500 households in the three countries. Launching the project at the Kampala Sheraton Hotel last week Kiwanuka said the partnership had come at an opportune moment when the country was grappling with severe housing shortage.
Statistics from the ministry of lands and housing show that Uganda is currently short of over 1.6 million housing units. The 2002 population and housing census revealed that only 18% of households in Uganda lived in permanent units. The situation was worse in rural areas where only 11% of the households lived in dwellings with permanent materials.
Minister Kiwanuka revealed that with the standard occupancy of 4.8 persons per housing unit, close to half a million people are not housed adequately as many people are forced to live in congested environments with relatives or friends.
She expressed optimism that "The programme will enable the local financial institutions to leverage more resources to expand the product range available for house construction by the low income groups."
Kiwanuka said there are many households which cannot afford formal finance because of costs or the necessary requirements such as land titles and viable business with substantial cash flows.
She advised that the program should enable households to realize their dream house while spreading the payments over a long period so as to maximise benefits from a given amount of regular income.
"Growth in the housing sector is skewed towards a few people who either have own savings or can access the relatively costly financing from commercial banks," she explained.
"The limitation on funding options especially mortgage products means that households have to sacrifice present consumption and other investments or pay more through expensive commercial loans that are not suitable for housing."
Kiwanuka appealed to financial institutions to join the partnership to ensure decent housing for all Ugandans. "With such a great demand for housing pegged to increasing levels of incomes and falling poverty levels, the housing market will continue to grow and provide a viable long-term portfolio for financial institutions," she observed.
Ezekiel Esipisu, the Habitat for Humanity housing finance director, explained that $100m of the $102m will be lent out to microfinance institutions (MFIs) which will later use it to advance housing loans to low income families in the three countries.
The other $2m will go into developing MFIs' capacity to start efficient housing loan schemes tailored to the construction needs of the poor. This follows a revelation that the portfolio for housing finance is just 1% in the whole of sub-Saharan Africa.
Source : abdas.org
Posted on : 30 Nov,-0001