Author: Kihingu Inc

The art of market facilitation: learning from the FSD network

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When taking a market systems approach, development organisations such as those in the FSD network act as facilitators of market development—external change agents whose role is to develop actors in the market system to increase financial inclusion.

While facilitators work in a variety of ways, their primary role is to address constraints, in order to allow and facilitate the market system to function more effectively and inclusively. Facilitation is therefore a public role (not a commercial one); it is a temporary role (it is time-bound); and it requires understanding of the market system and the capacity to intervene with appropriate resources (financial, human and political).

The purpose of this paper is to provide guidelines on some key, practical questions facing facilitators, based on synthesised learnings from the FSD Network as captured in seven case studies written by the Springfield Centre. This document explores the art of market facilitation in action through the lens of the FSD network  to bu understanding around the M4P approach. The paper examines the wider lessons and challenges that emerge for organisations addressing the dilemmas of developing financial markets for the poor, and how they differ significantly from other conventional approaches.

We hope that you find the learnings in this synthesis paper useful and that they shed some light on your path to effective market facilitation.,

Reaching the mass insurance market: where to start when going digital

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For insurers to serve a new type of client at scale they must change their modus operandi. The high costs associated with conventional insurance cannot be absorbed by low premium products. This means that existing structures need to be adapted to serve the low to middle-income mass market.

One key to success lies in digitization, which can be used to automate existing (often paper-based) processes. Going digital has obvious benefits: minimising expenses, reducing the scope of human error, improving efficiency and achieving scale. But, how can insurers begin to make this shift?

Working with our partner Britam in Kenya, we have seen one route to becoming a digitally-driven insurer: start with strategic process mapping.

So what does a strategic approach to process mapping look like? Process mapping involves creating a flow chart to capture every step in a process. This is then analysed to see how the process could be redesigned. Process mapping can both reveal opportunities for automation and help manage the internal change required to put it into action.

The strategic element of process mapping lies in identifying how new processes can achieve greater efficiency and also help improve the client’s experience. The ILO’s Impact Insurance Facility advocates human-centred design, which focuses on integrating the experience of the target group into product design and delivery. To improve the client’s experience, we have found that careful analysis is needed both of client interactions and back-end processes.

To illustrate, let’s take a simple example. At Britam, one of the team’s many tasks was to redesign the member information gathering process at enrolment to cut data entry and courier costs. The team started by looking at the systems and resources in place to capture data, and the experience of internal and external stakeholders interacting with the system. Careful analysis from both “outside-in” and “inside-out” uncovered pitfalls and opportunities for automation of members’ enrolment data gathering, such as customers processing their own data through an automated platform.

However, there are limits to automation, including limited client access to internet and smart phones. This problem extends to partner organisations, who are in many for automated processes. For example, the mission hospitals who work with Britam prefer paper claims submission.

Furthermore, there may be initial teething problems with automation, especially when it is only partial and still relies on a degree of human intervention. For example and as illustrated by the graph, after making significant reductions in claims processing times through process automation, Britam found that the processing time started to increase again due to staff constraints. This highlighted the need to support process changes with training or new staffing structures.

Our change management projects have repeatedly shown that digitization success does not lie solely in introducing technology, but in how people are placed to handle this change. Understanding what it takes to encourage and sustain behavioural change, both internally and externally, is key to change management and to reaping the rewards of going digital.

This blog is part of a joint series between the ILO’s Impact Insurance Facility and FSD Africa. The series explores practical solutions to manage change within insurance providers.

Getting ahead of the curve: how the regulatory discourse on M-insurance is changing

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Nearly a year ago, we joined the A2ii in Abidjan to sit down with a roomful of regulators to discuss the challenges and imperatives CIMA faces in regulating mobile insurance at the CIMA-A2ii Workshop on Mobile Insurance Regulation. In the CIMA context, as with most countries in Africa, mobile network operators (MNOs) and the technical service providers (TSPs) that support them are emerging as key players in extending the reach of insurance. The discussions at the workshop focused on how insurance regulators can broaden their focus to include these MNOs and TSPs, as well as how to cooperate across different regulatory authorities.

A year on, these considerations remain as valid as ever, but we have come to realise that there is more at stake than m-insurance. Digital technology is changing the insurance landscape as we know it by paving the way for new players and business models with the potential to rapidly expand coverage. This is causing a re-think of how insurance is traditionally delivered. In addition, while m-insurance remains important, looking beyond m-insurance to the broader insurtech field is important to truly understand the opportunities technology provides to change the game in inclusive insurance and the associated risks.

Thus far, the insurtech debate has largely focused on developed country opportunities. But the tide is turning. My colleagues and I recently scanned the use of insurtech in the developing world to see what the potential is for addressing challenges in inclusive insurance. We found more than 90 initiatives in Asia, Latin America and sub-Saharan Africa that fit the bill. What we saw is that the “insurtech effect” is happening in two ways.

Firstly, digital technology is a tool to make insurance as we know it better: it is being used as a backbone to various elements of the insurance life cycle, in an effort to streamline processes, bring down costs and enable scale. Examples include new ways of data collection, communication and analytics (think big data, smart analytics, telematics, sensor-technology, artificial intelligence – the list goes on), as well as leveraging mobile and online platforms for front and back-end digital functionality (such as roboadvisors, online broker platforms, mobile phone or online claims lodging and processing, to name a few!).

It also allows for more tailored offerings: on-demand insurance initiatives are covering consumers for specific periods where they need that cover, for example for a bus ride, on vacation or when borrowing a friend’s car for one evening, while advances in sensor technology mean that insurers can adapt cover and pricing based on usage, for example allowing customers to only pay car insurance for the kilometres they actually drive every month.

In all of the above, digital technology, including the application of blockchain for smart contracting and claims, makes the process seamless.

Secondly, digital technology is a game changer. In many ways, it is changing the way insurers do business, design and roll out their products, and, importantly, who is involved in the value chain. Peer to peer platforms (P2P) are a much-discussed example of these next generation models. They are designed to match parties seeking insurance with those willing to cover these risks. The revolutionary element lies in the ability to cover risks that insurers usually shy away from due to the lack of data to adequately price the risks – all now enabled by digital technology. But these platforms are often positioned in regulatory grey areas: if all the platform does is match people to pool their own risks, does it then need a licensed insurer involved? And if advice is provided by a robot powered by an algorithm, who is ultimately accountable?

No wonder insurance supervisors are sitting up straight when you mention the word “tech”. As Luc Noubussi, microinsurance specialist at the CIMA secretariat, said at the 12th International Microinsurance Conference in Sri Lanka late last year: “Technology can have a major impact on microinsurance, but change is happening fast and regulators need to understand it”.

So, how do they remain on the front foot in light of all of this, what different functions, systems and players do they need to take into account and what are the risks arising? In short: how can they best facilitate innovation while protecting policyholders? Front of mind is how current regulatory and supervisory frameworks should accommodate new modalities, functions and roles – many of them outside the ambit of “traditional” insurance regulatory frameworks – and what cooperation is required between regulatory authorities to achieve that.

Two weeks from now we’ll again be sitting down with regulators from sub-Saharan Africa for the Mobile Insurance Regulationconference hosted in Douala, Cameroon, from 23 – 24 February 2017 by the A2ii, the IAIS and the 14 state West-African insurance regulator, CIMA, supported by UK aid, FSD Africa and the Munich Re Foundation. This conference will delve into the opportunities that mobile insurance present and the considerations for regulators and supervisors in designing and implementing regulations to accommodate it. The imperative to find an m-insurance regulatory solution remains, but it is clear that the horizon has broadened: at play is the way that insurance is done across the product life cycle, who the players are in the value chain and, at times, the very definition of insurance.

As we suggested in an earlier blog, this could be microinsurance’s Uber moment, but then regulators need to be on-board. We look forward to taking part in the discussions to see how supervisors plan to do just that.

Five reasons why capital markets matter in Africa

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The significance of developing domestic capital markets as a means of financing priority sectors and driving economic development is increasingly being acknowledged by policy makers in Africa.

For instance, the African Union (AU), Agenda 2063, prioritises the development of capital markets on the continent to strengthen domestic resource mobilisation and double its contribution to development financing. Similar support is found in several national visions including Nigeria (FSS2020), Zambia (Vision 2030), Rwanda (Vision 2020), Uganda (Vision 2040) and Kenya (Vision 2030). About US$1 trillion in assets are currently held by pension, insurance and collective investment vehicles across sub-Saharan Africa. These funds have a serious problem finding enough investments that meet their risk and return requirements – there just isn’t enough “product” for them.  It means that there are projects today – e.g. in infrastructure – that are not getting financed. But this also has implications for the long-term ability of pension funds to produce adequate incomes for pensioners.

While central to facilitating SSA economic development, there has been little focus on understanding precisely why capital markets matter in Africa.

So why does Africa need capital markets? This article identifies five reason reasons:

  1. Providing long-term financing for priority sectors

Africa faces huge long-term financing needs for the real and social sectors.  FSD Africa (FSDA) estimates the funding gap for SMEs, infrastructure, housingness at over US$300 billion per year. The World Bank estimates that Africa’s infrastructure deficit reduces per capita GDP growth by 2 percentage points each year, delaying poverty reduction efforts. Equally, the Centre for Affordable Housing in Africa, estimates a housing deficit of at least 25 million units in Nigeria, Kenya, Angola, Ethiopia, Cameroon and Cote d’Ivoire. Local currency capital markets can contribute to narrowing the financing gap across these sectors. Capital markets provide long-term funds to growing businesses, infrastructure and housing. Capital markets can also support the financing of social sectors, including health and education.

  1. Complementing reductions in concessional funding

About half of the countries in sub-Sahara Africa are classified as middle income according to the World Bank. In the last decade, 10 countries in sub-Saharan Africa including Kenya, Nigeria, Ghana and Zambia, have joined this middle-income rank. This implies that these countries will gradually be weaned off the World Bank Group’s concessional lending window, International Development Association (IDA). In addition, they can expect to receive less concessional funding from bilateral donors. This implies that many of these countries will need to access commercial funding sources. The Eurobond market, one of such sources, exposes countries to significant foreign currency risk, because these bonds are denominated in hard currencies, leading to higher chances of defaulting on this debt. Local currency capital markets can ideally complement external funding to meet developmental challenges.

  1. Financing global challenges

According to the African Development Bank (AfDB), the share of Africans living in urban areas is set to rise from 36% in 2010 to 50% by 2030. Urbanisation at this rate can cause significant stress to infrastructure, social services and proliferation of slums. According to the United Nations Environmental Program (UNEP), Africa is projected to bear the greatest impact of climate change with the costs of adaption being estimated between 5-10% of GDP. Capital markets can contribute to financing of climate change investments through green bonds. Capital markets can also support urban development by financing urban infrastructure and housing projects. Capital markets instruments including Real Estate Investment Trusts (REITS), incorporating so-called Social REITS, can support affordable housing finance.

  1. Managing foreign currency and re-financing risks

The income streams associated with key infrastructure and housing investments are often denominated in local currency. By funding these investments in long-term local currency instruments, governments and the private sector avoid foreign exchange and refinancing risks. The Asian financial crisis in the 1990s and the crisis in Latin America in the 1980s powerfully demonstrated the importance of developing local currency markets. In Asia, overexposure to foreign currency loans led to economic collapse in several countries. On the other hand, refinancing risk arises where short-term debt is used to fund long-term projects. Failure to roll over this debt in the short term can lead to high financing costs and potentially defaults. Numerous examples exist where this has resulted in collapsed companies and job losses.

  1. Diversifying the financial sector

The financial sector in Africa is relatively small and bank-dominated. There have been significant advances in the banking sector over the last decade with increasing access to previously excluded populations, especially using mobile technology. However, the banking sector remains characterised by high interest rate margins and high returns on equity and assets. This implies that the sector is not playing its intermediation role effectively. By developing capital markets, countries can facilitate the diversification of the financial sector, providing a useful complement to the banking sector (at times competing with the banking sector, at other times encouraging it, e.g. through risk sharing instruments, to play a bigger role in new areas) and providing the public and private sectors access to long-term financing which is so hard to come by in SSA.  Capital markets can also help create new kinds of institutions through equity investment, tus broadening the sources of supply of finance.

As a strategic response, FSDA aims to transform capital markets in Africa into a credible source of funding for the real and social sectors. The priorities over the next five years include the bond markets (both government and non-government), alternative finance (including fintech and crowd funding, REITs and Islamic Finance), and equity (public and private) market development. Support for non-government bonds will focus on green bonds and issues in both the real and social sectors.

FSDA will leverage technical assistance interventions on the regulatory front with transactions support, aimed at developing a pipeline of potential issuers, and catalytic investments through development capital (DevCap). FSDA also aims to build the information base around long term finance – databases currently are scarce and incomplete – and will work closely with institutional investors to build their capacity to invest in the newer asset classes. FSDA will actively forge perships to implement its long-term finance agenda.,

The growth of M-shwari in Kenya: a market development story

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M-Shwari (meaning ‘calm’ in Kiswahili) is a combined savings and loans product launched through a collaboration between the Commercial Bank of Africa (CBA) and Safaricom. The M-Shwari account is issued by CBA but must be linked to an M-Pesa mobile money account provided by Safaricom. The only way to deposit into, or withdraw from, M-Shwari is via the M-Pesa wallet.

M-Shwari aims to deepen and diversify the consumption and income benefits of M-Pesa by providing clients with a facility to save and by offering credit beyond a user’s networks of family and friends. Surveys of M-Shwari users confirm that they mainly save and borrow to manage fluctuations in their cash flow and to cope with unexpected needs.

M-Shwari was launched in January 2013 and by the end of 2014 it boasted 9.2 million savings accounts (representing 7.2 million individual customers) and had disbursed 20.6 million in loans to 2.8 million borrowers. In 2013, only 19% of M-Shwari users were below the national poverty line; this had increa 30% by the end of 2014. It can be expected that the proportion of poorer users will grow over time, as usage amongst higher income groups approaches saturation.

The key point is that as a result of M-Shwari, millions of poor Kenyans now use savings and credit services that help them manage risks, mitigate the impact of shocks and, increasingly, invest in improving their livelihoods. M-Shwari was launched in November 2012, yet its scale means it has already changed the nature of the market, and is serving as a platform for the development of innovative new products.

FSD Kenya was instrumental in bringing M-shwari to the market in Kenya. It’s approach was one of using analysis to determine actions, in particular understanding the demand side of the financial sector – the ‘poor and the money’. FSD Kenya also encouraged a first principles approach to product development (i.e. seeking to understand poor clients and then design a product that responds specifically to their needs). From this wider market ent perspective, the sheer scale and seemingly unabated continued growth of M-Shwari and competitor products has changed the landscape of digital finance services in Kenya.

Read the full case study here.,

Crowdfunding in East Africa: a regulator-led approach to market development

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Earlier in 2016, FSD Africa partnered with the Cambridge Centre for Alternative Finance (CCAF) and Anjarwalla & Khanna to conduct a regulatory review of different crowdfunding models across Kenya, Tanzania, Uganda and Rwanda. This project is now in its final stages and we look forward to publishing the report in full in December 2016. The CCAF will also be launching the inaugural Africa & Middle East Alternative Finance Report to coincide with this.  In anticipation, here are some key findings to whet your appetites.

Crowdfunding is fast taking shape across East Africa – particularly non-financial return based models such as rewards and donations crowdfunding. However, return-based equity and loan-based crowdfunding are really only starting to emerge. The recent Allied Crowds and FSD Africa report highlights these supply-side trends well. Such FinTech models require careful and considerate attention from financial regulators in East Africa to catalyse and harness their potential positive economic and social benefits whilst addressing systemic and consumer risks and challenges.

The upcoming report highlights some key priority regulatory and policy areas necessary for market development in Kenya, Uganda, Rwanda and Tanzania while drawing on insights & experience from the UK, the USA, Malaysia, New Zealand and India.

Some of the key findings include the following:

  • There is no bespoke or specific crowdfunding regulation in East Africa or South Africa.
  • Non-financial return-based models dominate market activity in East Africa.
  • Financial return-based loan and equity models are only in the very earliest stages.
  • Loan- and equity-based models dominate total global activity, and account for the majority of market activity in more established markets, while donation- and rewards account for a small percentage of total market activity.

As for next steps, new crowdfunding regulations in East Africa are not recommended at the moment. Instead, other regulator-led, market development initiatives should be considered including:

  • A living database of all, existing, regulator-acknowledged platforms in East Africa.
  • Regulator engagement opportunities – to bring together the East African crowdfunding industry, practitioners, experts, potential funders and fundraisers.
  • Develop a regional regulatory laboratoryr ‘Sandbox’ to guide crowdfunding businesses through the relevant regulatory processes and requirements.
  • Regulators should encourage the East African crowdfunding platforms to build a regionally-focused industry association to undertake self-regulation and institute guidelines and principles to foster innovation while protecting investors.

The report goes into a great deal of depth covering markets in East Africa and other more established crowdfunding markets. It also provides useful guidance for crowdfunding platforms that are seeking to establish operations in these countries as well as hopefully encouraging platforms operating elsewhere to consider East Africa as a market to provide their innovative financial crowdfunding services.

We would like to thank the large number of contributors who have made this research possible including a wide array of regulators from the Capital Market Authorities, Central Banks and Communication Authorities of Kenya, Rwanda, Uganda and Tanzania asl as the host of experts, crowdfunding platforms and other policymakers that have generously provided their expertise and insight.

The report will be made freely available in December 2016. Follow up, in-depth workshops led by CCAF will be conducted in January 2017 in Rwanda, Tanzania, Uganda and Kenya with the various regulatory bodies. FSD Africa will stand ready to support regulators beyond this process.

Getting ready for take-off?

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What needs to be done to get Executive Coaching operating effectively in Nigeria? And why does this matter?

The executive and business coaching market in Nigeria can best be described as ‘nascent’, according to research conducted by Creative
Metier on behalf of FSD Africa on ‘Building the Market for Executive Coaching in Nigeria.’ It is estimated that there are only between 10 and 20 credible, accredited and experienced executive coaches in the country – for a population of about 174 million people. There is also no locally available coach training course that offers a route to internationally recognised accreditation. The Nigerian market includes both accredited and non-accredited coaches, but with an emphasis on life and spiritual coaching. From the research, “there are coaches coaching in the corporate space but they are life coaches…, so companies are not seeing the impact of coaching on the business side.”

Low coaching supply is also compounded by low levels of demand; with low levels of understanding the link between coaching and business results alluded to above. One coach interviewed in the study stated that, “there is confusion in understanding the three terms: coaching, mentoring and consulting.”

Business leaders also expect coaches to have knowledge appropriate to the industries where executives are being coached, as well as a strong track record and ‘gravitas’, on top of their coaching skills. A banking HR Director stated that acceptance of a coach would entail, “how successful you have been in what you have done? If the coach cannot impress me, I’ll be switched off.”

A Harvard Business Review (HBR) survey on coaching looked into the question of value and concluded that value is provided to both Executives and businesses – “As the business environment becomes more complex, [leaders] will increasingly turn to coaches for help in understanding how to act. The kind of coaches I am talking about will do more than influence behaviors; they will be an essential part of the leader’s learning process, providing knowledge, opinions, and judgment in critical areas. However, the study also cautions – A big problem that tomorrow’s professional coaching firm must resolve is the difficulty of measuring performance….”

A further study by Price Waterhouse Coopers (PWC) listed the following benefits from Executive Coaching:

  • 80% of coaching clients report a positive change in work performance, communication skills, interpersonal skills, and relationships
  • 7% of coaching clients report “very satisfied
  • 2% say they would repeat it under same circumstances
  • Individual clients have seen a median return of 3.44 times the investment.

Lack of information in the Nigerian market is the largest current barrier to the industry’s growth. This information gap can be readily addressed by:

  • Education on what coaching is, how it differs from other capacity building leadership initiatives, and what it is not;
  • Information on accredited coaches in the market and minimum accreditation requirements;
  • Information on the business case for coaching and evidence of its impact.

FSD Africa believes that coaching in Nigeria could be poised for take-off, although effective demand is currently low, there is an appreciation amongst market participants that coaching is an enabler of business success, and resolving these informational gaps will serve to catalyse the markets’ growth.

Building trust – why banking needs to be more personal

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In Edelman’s annual study on levels of trust in industries, the Financial Services industry once again came bottom, as they have done for the last 5 years. Although the industry has been recovering from its lows in the early 2010s, only 51% of people have trust in the sector. To put that in perspective, 9% of people have more trust in the Telecommunications industry and a whopping 23% have more trust in Technology companies (who have come top the last 5 years).

This “trust gap” exists all over the world and I was reminded of it on a recent visit to Nigeria. There, as part of one of our partners product launch, I met a lady who told me that she had recently signed up to one of the banks’ new services. When asked why, she said that on three previous occasions she had trusted a local Susu[1], who had then run-off with her savings. To be clear, the “trust gap” is not only an issue for women; many men face similar issues when dealing with formal financial institutions.

That is the heart of the problem. Financial management is difficult and we often entrust our hard earned cash to someone who, we hope, has our best interest at heart. But the world is full of people whose trust has been abused on financial matters. Almost everyone knows someone who was affected by the failure of a bank, defrauded by business associate (like that Susu) or trusted the wrong family member.

In this “low-trust” environment, financial institutions are increasingly battling these stories, as well as a lack of trust in the services they offer. Nowhere is this more evident than in the continued exclusion of women from financial services in developing countries. Despite being 40% of the world’s workforce, across the world, women owned businesses are experiencing a funding gap of $260billion to $320billion per year.

This is striking and becomes even more surprising when one understands that women are better at repaying loans. Not only that, they use money more productively and use financial services more frequently. This makes women profitable and, because of the high exclusion rates, a key target demographic to expand a client base.

Nevertheless, bringing women on board is not a top priority for many CEOs in the financial space. There is a catch; women, who are much more cautious when it comes to adoption of new products, are harder to gain as clients in the first place. In our work with Women’s World Banking and Diamond Bank in Nigeria we endeavour to increase the number of female clients by changing incentive structures for on-boarding agents, employ more female agents for outreach and designing products specifically targeting women.

Although we have brought on board many new clients of both genders, women are a smaller percentage than we would like (below 50%). Which takes us back to the issue of trust. The lady in Nigeria, had to be cheated out of her money three times before she considered approaching a formal financial service provide. That tells us that the level of mistrust of formal financial institutions is much higher than we want to admit.

Organisations such as FSD Africa, whose core mission is to develop financial markets that are responsive to the broader developmental needs of African economies and people, need to find better ways to reaching women and young people who are disproportionately excluded from financial services.

Our work with Women’s World Banking and our partner institutions Diamond Bank (Nigeria) and NMB (Tanzania) is to develop new products that seek to target these groups. One of the key learnings from our work is that products need to be well communicated to the target group and this often takes time. That is why Diamond Bank’s Agent Network in Nigeria has developed specific pitches for potential female clients. These go beyond a generic sales script, which is usually sufficient to bring on board male clients. The agents are educated on how to build trust with the customer and demonstrate that access to financial services gives them better security, improves their record-keeping and gives them greater financial control.

There are a number of other factors that limit women’s financial access. For example, many African countries remain highly patriarchal and women are less likely to be literate than men. Changing these attitudes takes time but ultimately, developing women’s ability to use savings and credit products will foster greater financial independence and increase gender equality.

Overcoming the “trust gap” is hard and that is why FSD Africa seeks to create long-term financial market impact, for both men and women. We understand that increasing financial inclusion is not just about the individual customer – our Change Management interventions seek to revolutionise the way financial institutions see and interact with their potential clients.

The “trust gap” exists for both men and women and relates to almost all Financial Service Providers. Consequently, FSD Africa is always looking for new partners that share their view on developing financial systems across the continent. If you or your institution are interested in building out services, as our partners have done, please reach out to us. FSD Africa will be speaking at the MasterCard Foundation Event in Kigali on the 20th and 21st of October 2016.

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[1] Informal savings channel in West Africa, usually operated by one person for a number of market traders).

Credit on the cusp

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Building healthy credit markets in Africa by 2026

African economies are currently undergoing dramatic changes, including a changing consumer base.  Absolute poverty is reducing as a new class of consumer—the cusp group—emerges.  This group (we call “cuspers”), which now accounts for 23% of sub-Saharan Africa’s population, covers a segment of active earners getting by on $2-$5 per day and straddling the formal and informal worlds.  For this group, healthy credit markets could expand opportunity and enable upward mobility, helping to build a true middle class.  But, for this to happen, credit needs to expand and to do so in healthy ways.

In the Credit on the Cusp project, we look at the experience of cusp group borrowers and the lenders who serve them in three distinctive markets—South Africa, Ghana, and Kenya—to better understand what healthy credit market development would mean for this group.  We explore some ways donors and policymakers can help build credit marable upward mobility for Africa’s cuspers

A review of some of Africa’s housing finance markets

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Overview

Across Africa, the residential investment opportunity is increasingly driving conversations about economic growth. While the definition of who is middle class and how many such households there are continue, the fact of Africa’s rising population and rapid urbanisation is palpable in its cities where the inadequate housing conditions of the majority are obvious.

For every problem, there is an opportunity for a solution, and in increasingly creative ways, this is what Africa’s housing investors are finding.

Most investment funds currently active were initiated when the African growth trajectory was on an upward curve. The past year has been challenging, however. Still among the fastest growing continents, Africa has seen its growth and development prospects seriously challenged by global economic pressures, the commodities downturn and the slowing Chinese economy. Where the prospects of oil and gas discoveries dominated the news five years ago, in 2016 it is their loss in value ng governments reconsider their economic development strategies. The key challenge in this environment, is economic diversification. Can housing contribute towards that opportunity?

Governments can contribute significantly to a developer’s ability to deliver affordable housing at scale, by paying attention to the rough spots along the housing value chain: the availability of land, its servicing (especially water and electricity), and its registration;
the availability of domestic building materials and a functioning construction sector; the time it takes to get administrative approvals for the building process, and the cost of such approvals; the taxation, finance and macro-economic framework; and the functioning of the labour market, among so many other factors.

Read full report from”http://housingfinanceafrica.org”>CAHF here.,