Housing Loan Scheme in Zimbabwe

December 6, 2013 by Olga Koma | 8 Comments

Zimbabwe’s financial sector has remained resilient besides slowing GDP growth in recent years. Notwithstanding the country’s highly developed financial sector (16 commercial banks, 3 building societies and about 150 microfinance institutions), financial exclusion persists. FinScope’s 2011 survey found that 40 percent of the population were excluded from formal and informal banking.

The current housing deficit in Zimbabwe is estimated at 1.25 million units, and housing supply has been made a priority by the Ministry of National Housing and Social Amenities. A social National Housing Policy was adopted in 2012, highlighting mass housing projects specifically aimed at low income earners. The price of a newly built house is somewhere around US$12 000, which goes at a rate of  anywhere between 14% and 18%. CABS for example, charges a rate of 15% over a 10 year plan, with a 75% (Loan to Value) LTV and 25% repayment to income. According to a recent article on AllAfrica, the City of Harare and CABS Zimbabwe, have embarked on a big housing project to construct 3 102 houses. The units will be sold for between US$17 000 and US$27 000, and CABS will provide financing over 10 year loans. In many instances (compared to other counterparts in Africa) this is affordable particularly for the middle class. However with almost 40% of the population under the national poverty line, alternative solutions are needed for this group.

In comes Vantage Affordable Housing Company, a micro credit MFI providing affordable finance solutions for low income earners. Vantage has partnered up with United Builders Merchant (a Zimbabwean building material and hardware store). This partnership will enable low income earners to finally be able to access housing through a finance scheme called ‘Build one room at a time’. While other financiers require some level of collateral, Vantage does not; the only thing they require is an approved building plan. The model will require the customer to deposit 50% of the cost of building one bedroom and Vantage will cover the rest as a loan. After having realised the potential of housing microfinance, Vantage was able to build a model that ensures that the client utilises the funds as intended.

DISCUSSION THREADS

  1. ngonimupamba , 14 October 2014

    I want a to apply for the house of cabs housing scheme

  2. ngonimupamba , 16 December 2014

    I want to buy a under housing microfinance

    • Centre for Affordable Housing Finance in Africa , 18 November 2016

      Good day, I suggest contacting Vantage Affordable Housing Company on info@vantfin.co.zw.

  3. milka , 12 January 2015

    How can one qualify to get a housing loan in Zimbabwe.

    • Centre for Affordable Housing Finance in Africa , 18 November 2016

      Dear Milka, to get more of an idea of banks offering mortgages and housing loans in Zimbabwe please read our Zimbabwe Yearbook profile on http://www.housingfinanceafrica.org/country/zimbabwe. Thereafter, you would need to contact one of the banks to find out lending criteria.

  4. Tafadzwa Kuchenga , 23 January 2015

    Dear Sir/ madam, I’m looking for a loan, currently I’m working in South Africa, in Anglo Platinum Mine, and banking with Standard Bank, my ID number is 22-22 1414 k47, I need a loan to build a house in Harare, please assist yours faithfully Tafadzwa Kuchenga

    • Centre for Affordable Housing Finance in Africa , 18 November 2016

      Dear Tafadzwa Kuchenga, currently, the two banks that we are aware of in Zimbabwe which offer loans to diaspora are CBZ and CABS. Also, refer to Stanbic. We suggest that you call them. To get more of an idea of banks and access to finance in Zimbabwe please read our Zimbabwe Yearbook profile on http://www.housingfinanceafrica.org/country/zimbabwe.

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