Rwanda is seeking US $300m from international lenders in bid to address housing shortage facing the country. This initiative by the Rwandan government are interventions on the estimated 31,000 units demand annually.
Claver Gatete Infrastructure Minister confirmed the reports said that The World Bank, International Finance Corporation (IFC) and India Housing Bank(IHB) are in the process of approving the loan.
“The IFC is leading the credit mobilization process and the government is also making land available and introduced a 30% tax for developers of high density housing units,” said Claver Gatete.
Claver Gatete said that the World Bank Group will approve the loan in a months time and its estimated to build up to 6000 homes.”The money will be a revolving kind that will provide cheap loans below commercial rate with long period of repayment.”
Expensive mortgages and low supply of affordable housing and the lack of a long term finance has plunged the country into the crisis. additionally, the multiple challenge in the limiting chance of both demand and supply of home ownership has been a contributing factor.
Claver Gatete say housing loan and will be pushed by 400-600 basic point and the lending rate of 16% will be pushed to 12% in the new credit line.
Salaried employees earning US $795 per month receive mortgages and housing loan-books from bank more than the rest thus leaving out majority of the population.This makes most people use substandard materials in building their homes in phases. All this has resulted to an increase in informal settlement. Its is averaged that annually, only 1000 new affordable housing units remain.