Rwanda is seeking US $300m from international lenders in bid to address housing shortage facing the country. This initiative by the Rwandan government is an intervention towards reducing the estimated 31,000-unit demand annually.
Claver Gatete Infrastructure Minister said that The World Bank, International Finance Corporation (IFC) and India Housing Bank(IHB) are in the process of approving the loan. The IFC is leading the credit mobilisation process and the government is also making land available and introduced a 30% tax for developers of high density housing units,” said Claver Gatete.
Gatete said the World Bank Group will approve the loan in a month and it is estimated to build up to 6000 homes. ”The money will be a revolving kind that will provide cheap loans below commercial rate with long periods of repayment.”
Expensive mortgages and low supply of affordable housing and the lack of long-term finance has plunged the country into the crisis Gatete said the lending rate of 16% will be reduced to 12% in the new credit line.
Salaried employees earning US $795 per month receive mortgages and housing loans from banks leaving out the majority of the population. This makes most people use substandard materials in building their homes in phases. All this has resulted to an increase in informal settlements.