Housing Micro-Finance & Informal Land Markets the case of KixiCrédito Angola

Transcription

1 Housing Micro-Finance & Informal Land Markets the case of KixiCrédito Angola Panel of the Centre for African Housing Finance Habitat 3 Conference on Informal Settlements Pretoria 7-8 April 2016

2 Angolan Housing Policy Angola has made a declaration of the political will of the State to resolve the urban problems associated with the post-conflict shortfall in the supply of housing. Public commitments have been made by senior political officials regarding the urgency of ensuring that each citizen has a decent place to live (the most important being the promise made by the head of state in 2008 to build 1 million homes). From the practical point of view, Angola s housing policy is still being developed along with a formalised housing sector programme.

3 Housing Demand Estimates Programa Nacional de Urbanismo e Habitacao Novo Jornal - 4 Dez 2009) Year > Total Population 10,098,727 13,373,161 14,187,587 14,613,214 15,968,000 17,448,942 19,066,930 20,834,949 Housing Stock (units) 1,229,741 1,279,423 1,305,011 1,384,888 1,469,654 1,559,609 1,653,184 Added Demand (units) 107, , , , , , ,426 Total Demand (units) 485, , , , , ,144 1,097,256 1,224,514

4 Bankable Demand for Housing & Housing Credit Housing Construction Cost Breakdown MINUA 2005 Roofing 25% Land 16% Potential Market Segment Pyramid Elite 25% 29% Middle Class Banked Mortgage Labour 12% Economically 60% 56% Timber 5% Active Poor Potentially Housing MicroFinance Clients Not Banked Blocks 21% Cement, 21% Vulnerable Groups Heavilly Subsidised Housing 15% Un-Bankable (2015)

5 Demand for Housing Finance Potential Housing Finance Clients Non-Contract Workers 9% Entrepreneur & Employee 1% Economic Sector of Potential Housing Finance Clients Agriculture 1% Services 42% Salaried Employees 38% Micro- Entrepreneur 52% Trade 53% Manufacturing 4%

6 Supply of Housing Finance Bank 7.6% Employer 8.4% Family 59.0% Friend 25.0% Sources of Housing Finance (DW Study 2009)

7 Undeveloped Mortgage Market One of the most undeveloped economic opportunities is the real estate market. The socio-economic opportunity of using property investment for wealth development remains largely unexplored. Even properties that can serve as collateral (those that have their legal status in order), are not normally accepted by banks to secure loans. In Angola, since the legal conditions still do not permit, lien-based mortgages as a means to transfer ownership of real-estate property of the debtor to the creditor to provide secure loan guarantees.

8 Commercial Bank s Reluctance Some of the reasons that banks offered to justify their reluctance to offer housing loans were the following: The lack of clear land legislation and a mortgage law that would allow property to be used as guarantee The long loan periods the bank needs to wait to recoup their investments The lack of a Government policy on subsidising housing credit Lack of title documents by most clients Lack of a client culture of repayment of debts

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10 How buyers acquire and secure their land A total of 61.3% of the sample bought their land on the informal market. Declaration of purchase & sale Contract of sale Land site survey map Title or precarious occupation Title of Surface Rights Land Registry License of occupation Contrato de compra e venda 12.2% Recebi uma declaração 49.1% Nenhum documento 14.4% Croquis de Localização 7.3% Outra 0.0% Titulo de ocupação precario 5.6% Direito de Superfície 0.5% Registro Predial 0.5% Licença de arrem atação 0.2% Testemunhado por tecnico do governo 6.8% Acordo foi publicado 1.5% Recibo da utilidade publica 1.0% Cartao de morador 0.7% Only 6.8% of the total sample has legalized possession in accordance with current legislation.

11 Planned Supply of Housing 800, , % 600, , , , , , % 12% 8% 0 Public Sector Private Sector Cooperatives Self-Help Distribution of One Million Houses by Sector

12 Potential for Housing Microfinance Housing microfinance attempts to fill the gap between government subsidy programs and the traditional sector by adapting the principles of microenterprise finance Low Income Demand for Housing Finance High Income Government Programs NGOs No access to formal housing Consumer Lenders Mortgage Banks Niche for Microfinance Cooperatives

13 Advantages of Microfinance in an Insecure Tenure Environment Repayment risks are reduced by shorter loan-terms and smaller amounts Opportunities of a large unserved market of normally unbanked and unbankable customers Allows microfinance institution to work with majority of people who lack full title Does not require access to long term sources of funding Promotes the financing of traditional forms incremental housing

14 KixiCredito Micro-Credit More than 25,000 clients, 62% of them women, currently are receiving loans through a network of about 2000 solidarity groups and 18 branches in 17 of Angola s 18 provinces. Loaning $45 million last year (2015). Angola s first non-bank Micro-Finance Institution KixiCredito has been launched to serve poor clients who do not have access to commercial banks.

15 KixiCasa KixiCasa is a re-launch KixiCrédito's housing product offering clients loans for improving their houses or building phased up-gradable houses over several loan cycles.

16 CLIFF HOMELESS INTERNATIONAL HabiTerra - land management and housing

17 HabiTerra land management and housing HabiTerra provides urban development services linked to low-cost housing delivery, including: Participatory urban planning (peri-urban and neighbourhood level) Urban land layouts: green fields (expansion zones) and brown fields (upgrading) Land control through urban cadastres & land registries Provision of secure land rights in legal and socially legitimate terms

18 CLIFF HOMELESS INTERNATIONAL HabiTerra land management and housing HabiTerra responds to an immense and largely untapped market for services is the owner built and low-cost housing sector which is provisioned to meet 68% of the Angolan Government s ambitious 1 million house programme.

19 Findings & Conclusions The public sector responsible for the legal regulation of citizen s property rights is very bureaucratic. The process for the concession of land title to real estate developers is slow and expensive. There too many overlaps between the various State actors in relation to the administration and attribution of property rights Private real estate developers largely shy away from providing low-income housing, in spite of having a large market and huge demand for this type of product. Real estate developers are drawn to the lucrative, high-end of the market. Most investors in social housing are only looking to make their profits from Government subsidies.

20 Recommendations Angola needs to implement long planned-for legal reforms in land tenure and mortgage financing to unlock sustainable real-estate markets for social housing. New sources of investment capital for housing may be mobilised from non-state sources such as pension funds and private investment funds. Land value-capture through Participatory Inclusive Land Readjustment has proven to be effective Social investors can provide guarantees to commercial banks that can be used to mitigate their risks and encourage them to unblock commercial loans to housing finance and Microfinance Institutions.

21 Thank you