The government of Rwanda and the World Bank Group have signed a $150 million International Development Association credit agreement to expand access to housing finance.
The Rwanda Housing Finance Project is centered around the provision of long-term finance to support the development of the mortgage market. The project consists primarily of a line of credit to financial institutions to support the expansion of mortgage lending which will be implemented by the Development Bank of Rwanda.
Speaking after the signing Minister of Finance and Economic Planning Dr. Uzziel Ndagijimana noted that « This project will expand access to housing finance to households and will support capital market development in Rwanda.
« The Government is keen to ensure the sustained provision of long-term finance to support the development of the mortgage market beyond the lifetime of the project. » He added
World Bank Country Manager Mr. Yasser el Gammal said that « This project is expected to provide six thousand new housing loans to targeted households thus creating incentives for private sector participation in the housing market’. It will also create a socio-economic transformation at a household level which is achieved by spending less of monthly budgets on housing, leading to an income substitution effect toward improving education on and health outcomes for families ».
The Rwanda Housing Finance Project will also strengthen the enabling environment for affordable housing and financing through technical assistance (TA). Working in close coordination with relevant Government departments and agencies, the TA will focus on efforts to address housing supply constraints such as high cost of land and building materials by preparing and enhancing the grounds for private developers to construct more affordable houses than what is currently offered in the market.
The primary beneficiaries of this project are Rwandan households which have limited or no access to mortgages under the current market conditions.
