South Africa: AfDB approves R570m loan to finance affordable housing
The country faces acute shortage of affordable housing in its main urban areas.The Housing Investment Partners Trust 2 (HIP2) has received a R570 million loan from the African Development Bank (AfDB) to help finance affordable housing programmes in South Africa.
The loan will help improve access to long-term affordable housing finance to South Africa's lower-middle income earners currently with limited opportunities to access affordable mortgages.
Although South Africa is one of the more developed economies in Africa, the country still faces an acute shortage of affordable housing in its main urban areas, estimated at 3 million units in 2014.
This has resulted in more than 2,600 informal settlements springing up around 70 of South Africa's major urban areas, making it very difficult for the government to reduce inequality and achieve inclusive growth targets.
Stefan Nalletamby, Acting Vice President for Infrastructure Private Sector and Director, Financial Sector Development Department said: "The approved intervention will assist HIP2 in expanding and deepening South Africa's housing finance sector and encourage orderly urban development for the provision of basic utilities such as water, sanitation, roads and electricity. In this respect, it will improve the lives of South Africans whilst also assisting in creating new employment opportunities."