Finance institution extends US$25m housing credit line 

Source: Finance institution extends US$25m housing credit line | The Herald

Finance institution extends US$25m housing credit line
Finance and Economic Development Minister Professor Mthuli Ncube (left) and his National Housing counterpart Daniel Garwe jointly address the media on access to housing finance from Shelter Afrique at the New Government Complex in Harare yesterday. — Picture: Believe Nyakudjara

Rumbidzayi Zinyuke

Senior Reporter

Shelter Afrique, a pan-African finance institution involved in housing, has extended a US$25 million line of credit to Zimbabwe’s private sector housing programmes through three Zimbabwean institutions to build 5 000 low-cost houses in line with the National Development Strategy 1. 

Of the total lines of credit, BancABC gets US$11 million, National Building Society (NBS) US$4 million and the Urban Development Corporation (UDcorp) US$10 million. Shelter Afrique is a partnership of 44 African governments, the African Development Bank and the Africa Reinsurance Corporation. It was set up to mobilise funds to build homes.

Speaking at a joint press briefing with National Housing and Social Amenities Minister Daniel Garwe yesterday, Finance and Economic Development Minister Mthuli Ncube said the opening of credit lines to the private sector was a direct result of Government’s re-engagement agenda and the desire to reconnect with the global financial community.

“What this entails is that Government is playing its pivotal role of facilitating housing delivery through private sector participation. All local private enterprises that have or intend to implement housing projects are eligible to access lines of credit from Shelter Afrique, subject to meeting the terms and conditions set.

“Housing is a key pillar of the NDS1 and investment in housing is how we create a middle class because the way you measure the value of a household is through its housing assets. Clearly housing ownership is important to moving Zimbabwe to upper middle economy status by 2030.”

Besides the three institutions that had received financing, there were other applications from Zimbabwe that were at an advanced stage of approval, which could drive the total credit from Shelter Afrique to US$35 million.

“It is pleasing that local banks are working with Government and the financial institutions are fronting the access to these lines of credit for housing delivery. It is my strong conviction that housing delivery should be predominantly private sector driven, while Government facilitates and only comes up with intervention programmes where necessary,” said Prof Ncube.

Minister Garwe said the need for participation by the private sector could not be overemphasised as it was key to achieving Vision 2030 targets.

“It is in this context that the ministry takes front and centre in facilitating private sector participation in low-cost housing and social amenities delivery,” he said. 

But the ministry would be a quality controller, monitoring to ensure the quality of housing units being built by the private sector.

“The private sector cannot come in independent of Government participation in the delivery of housing. We have teams of engineers, quantity surveyors and planners ready to supervise those works. We know the mistakes that we made yesterday where we provided people with land for them to develop and they failed to deliver. We lacked on the supervision so we drew lessons from that so now we have ready teams to supervise,” he said.

BancABC chief executive Mr Lance Mambondiyani said the bank was targeting to build 2 000 new houses in the next three years using the funds from Shelter Afrique. 

“Our expectation is that this will go a long way in solving the challenges of low-cost housing. We have built about 500 units at the initial phase but we hope to increase that to about 2 000 new housing stock in the next 2 or 3 years,” he said.

The bank was working with the ministry to ensure that the houses benefit low income earners and beneficiaries had been selected from the national housing waiting list.

NBS managing director Mr John Mapiye said the funds would be channelled towards the completion of 700 units in Harare and Mutare.

UDCorp expects to complete 2 000 housing stands at the Knockmalloch estate near Norton which are currently at 40 percent completion.

Minister Garwe encouraged the private sector to consider alternative technologies to increase the pace at which they will build houses.

Cabinet recently approved the use of alternative technologies like the Three-D technology in the construction of houses, something that could considerably reduce the time taken to construct a single house or flat.

Minister Garwe said there were foreign companies that had already expressed interest in participating in housing development and this would drive the delivery of 220 000 houses and flats by 2023, as set out in NDS1.