The signing ceremony took place on 12th July 2012 at Shelter-Afrique Centre, Nairobi. Shelter Afrique was represented by its Managing Director, Mr. Alassane Ba and Makao Mashinani Ltd (Makao) was represented by its Managing Director Mr. Aleke Dodo and Director Jane Weru.
The loan of Kshs 40 million to Makao, approved by the Board of Shelter Afrique in June 2012, represents the first facility to support low cost/social housing initiatives in Kenya. The loan will be used to support social housing initiatives through individual housing micro loans. An estimated 2,000 households are expected to benefit from this facility through provision of decent housing.
Shelter Afrique’s interest in the social housing echoes increasing interest in this sector from the public and private sectors across Africa and from international donors. There is a broad understanding of the large unmet demand for social housing and inadequate finance for this market. Shelter Afrique’s involvement in the middle income housing segment is an asset, placing its social housing programme as part of its larger holistic efforts to expand the supply of housing and strengthen housing markets throughout Africa.
Kenya remains one of the largest and most viable markets for social housing in East Africa. Affordable housing remains one of the key challenges in infrastructure and basic human needs, particularly in rapidly urbanizing cities and peri-urban areas. Kenya has high social housing market potential due to the high level of government support and buy-in, and ongoing commitments to promote social housing across the public and private sectors.
Speaking during the signing, Mr. Bâ noted that this is a great opportunity for Shelter Afrique to be engaged in the provision of low cost housing initiatives. Shelter Afrique has identified social housing as a strategic priority and is interested in expanding its market and products to social housing suppliers and micro housing finance providers. He stated that the facility fits well into Shelter-Afrique’s strategy of supporting and partnering with likeminded institutions looking for creative ways to finance lower end housing segment. Kenya provides the necessary enabling environment for a successful pilot of Shelter Afrique social housing programme, particularly owing to its strong developer industry, housing finance system and commitment of the national government. He emphasized that the loan had been provided at concessionary rates and this should trickle down to end beneficiaries in terms of reduced funding cost. He appealed to other African institutions to partner with Shelter Afrique to help deliver low cost housing.
On her part, Ms. Jane Weru reiterated that Kenya faces a huge challenge in terms of social housing supply deficit. She thanked Shelter-Afrique for the facility and hoped the partnership will last for long and yield good fruits to enable low income people have decent shelter.
Makao Mashinani Ltd is a for-profit Housing Microfinance company with a strong social mission. Makao provides secure livelihoods and wealth-creating financial services throughout affordable housing value chains that produce a positive impact in form of shelter to landless poor urban residents. It has an innovative approach to supporting economically active urban poor residents of slums and informal settlements realize their dreams of living in decent houses. Makao finances housing activities ranging from land acquisition, construction of houses, housing infrastructure and technical assistance on low-cost housing
Given that 90% of Kenyans cannot afford developer-built housing in its current form, Shelter Afrique has opted for supporting institutions that reach low-income populations through self-built and incremental building solutions, such as Makao Mashinani Limited.