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World Bank announces $15 million credit to expand access to affordable housing

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(Agence Ecofin) – The rapid increase in urban populations has increased housing needs in Djibouti. With very little access to mortgage loans, low-income households face many difficulties in becoming homeowners. The new World Bank project aims to stem this problem.

The World Bank, through the International Development Association (IDA), will release funding of $15 million to the government of Djibouti to improve access to affordable housing. The information was published on the institution’s website this Wednesday, January 11.

According to Bank data, population growth and rapid urbanization have increased housing needs in the country, and ever-increasing demand has driven low-income families into exclusion. Indeed, 78% of Djibouti’s population currently lives in urban areas, and this population is increasing by approximately 4.2% each year.

This trend has put increased pressure on the housing market, with low-income households largely left out of the mortgage lending and housing construction sector. concludes the Bank.

This financing will come through the scope of an existing partial credit guarantee fund for mortgage loans, and will be implemented in partnership with the private sector. The Bank aims, through a partial guarantee of $7 million, to mobilize around $70 million of private capital from banks to finance mortgage loans for houses. Ultimately, the project aims to promote housing microfinance and facilitate the conversion of lease-purchase contracts into mortgage loans.

It will introduce innovative financing solutions to enable the poorest households to build their own homes, while supporting policy reforms aimed at reducing construction costs. Homes built by households themselves will need to meet certain construction standards to ensure their resilience to climate-induced floods and fires “, explains the Bank.

It should be noted that, according to the Bretton Woods institution, nearly 2,000 low- and middle-income households should benefit from the project, and around 450 poor households should have access to financing to build their own homes. The project also aims to bridging the gender gap in mortgage financing and home building “.

Jean-Marc Gogbeu

Read also:

18/12/2022 – Djibouti: IMF expects growth to slow to 2.5% in 2022, against a backdrop of deterioration in the trade balance

21/12/2022 – Djibouti: the World Bank and the European Union join forces to boost the growth of MSMEs

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