Financial Sector Development in Africa: Opportunities ... - World Bank

CHAPTER 4
Housing Finance
Simon Walley
The aim of this chapter is to provide an assessment of where housing
finance stands across the African continent in the aftermath of the world
financial crisis. This is an ambitious task given the diversity of economies
and housing finance systems that encompass the North African Maghreb
countries, Sub-Saharan Africa, and the Indian Ocean countries, as well as
the special case of South Africa, which stands out from many of its
neighbors.
The world downturn brought on by the credit crunch was itself borne
out of the failures in the housing finance mechanisms in the United
States and other “mature” markets. These failures precipitated a wideranging
review of how the financing of homes is best delivered. This
review includes a reappraisal to determine which institutions may be the
best placed to deliver housing finance and to which types of borrowers.
The crisis has yet to fully run its course, but some salient policy lessons
have nevertheless already been drawn. This chapter will consider to what
extent these lessons are relevant and applicable to African markets.
This housing finance overview will also seek to describe and quantify
some of the driving forces behind both the supply and demand for housing
finance in Africa. The assessment of future demand can be based on
population growth, income growth, and urbanization trends. Juxtaposing
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