Micro-lender Letshego gets US$50m loan from IFC to boost affordable housing in Namibia

NAMIBIA – Pan African microlender Letshego has received a KSh5.49 billion (US$50 million) loan from the International Finance Corporation (IFC) to boost affordable housing lending in Namibia with the potential to expand the partnership to other countries including Kenya.

The IFC, the World Bank’s private-sector lending arm said it is committed to working with partners across Africa to help increase access to affordable housing, including supporting the development of sustainable and responsible mortgage markets.

The lender’s new loan will help it finance up to 4,000 home developers in Namibia, the firm said in a statement.

The firm, which is listed on the Botswana Stock Exchange, provides unsecured consumer loans and besides Kenya has operations in 11 countries including Mozambique, Namibia, Swaziland, Tanzania, Uganda and Zambia.

Access to affordable housing has been a problem in many African countries, with private developers largely concentrating on the higher end of the market-leading to an oversupply in that segment even as countries continue to suffer a housing deficit.

“Our strategic purpose is clear – we want to improve lives across the communities where we operate. Increasing access to simple and appropriate financial solutions, for more individuals and small business owners, will enable us to deliver on this promise. By partnering with global institutions like IFC, which share our vision of achieving social impact through sustainable commercial strategies, we can unlock exponential value and potential for us to do more. This is truly an exciting partnership. We appreciate the support, synergy and partnership that IFC brings to our strategy,” commented Andrew Okai, Group Chief Executive, Letshego Holdings.

Although 78 percent of Namibians have a bank account, only 12 percent of households have mortgage-financed homes.

“By partnering with global institutions like IFC, who share our vision of achieving social impact through sustainable commercial strategies, we can unlock exponential value and potential for us to do more”

The majority of Namibians do not qualify for mortgages from commercial banks because they are often unaffordable.

“Letshego works with a number of partners to deliver productive lending solutions, like affordable housing, across our footprint in Africa. We have launched affordable housing in four out of our 11 markets so far – Kenya, Uganda, Tanzania and Namibia,” said Adam Kasaine, the Chief Executive Officer of Letshego Kenya Limited.

“Currently in Kenya, the housing deficit is sitting at 80 percent. With our affordable housing solution, Letshego aims to bring more homes to more Kenyans,” he added.

The Kenyan government has set an ambitious target of developing 500,000 new affordable houses by the end of next year, largely through partnerships with the private sector.

The firm is the latest among regional financial institutions to raise billions of shillings from international financiers to fund their expansion and ride out the increased economic risks brought by the Covid-19 pandemic.

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