Microfinance has been increasingly popular on the African continent, with twenty-two countries passing microfinance-enabling legislation since 2002 aiming to increase access to finance for those without a formal banking history. South Africa has some of the highest microfinance activity among Sub-Saharan African countries, but the market is highly concentrated, with just three microfinance institutions accounting for US$3.42 billion in loans – and a single retail bank holds 99% of that total. Some of this microfinance – like South Africa’s Kuyasa Trust – is dedicated specifically for housing.
Although these housing microfinance products have been increasing, they are still limited – and they don’t expand access for all low-income groups. In this context, community-based savings groups hold potential for expanding finance access, even in South Africa, which is considered the economic powerhouse of the continent. Similarly, groups like Shack/Slum Dwellers International (SDI) have developed funding streams that allow women’s savings groups to save for their own housing.
Source:
World Bank Group. (2015) Stocktaking of the Housing Sector in Sub-Saharan Africa : Challenges and Opportunities. World Bank, Washington.
Link: https://openknowledge.worldbank.org/handle/10986/23358.