The Botswana Insurance Fund Management ( Bifm) and FinMark this week tried to set aspiring home-owners up on the property ladder by organizing a workshop to discuss issues impeding Batswana from owning homes.
The workshop, held on Tuesday, brought together key players from the banking sector, fund management companies and property developers to mull over a range of plans that could see more Batswana entering the property market.
The move comes at a time when there are shocking statistics indicating that over 60 percent of Batswana are most likely to get decent homes as envisaged under Vision 2016.
So far, about 394,000 Batswana have shelter but the bulk of them are staying in sub-standard houses ÔÇô either on SHAA areas or informally built houses. Further, out of that figure, 77,000 have rented from property agents such as BHC.
What is most critical is that those staying in SHAA houses have little or no chance to graduate to upper levels.
Bifm’s Chief Executive Officer, Victor Senye, said his organization, which is the biggest fund management company in the country, is looking at improving the policy frame-work and see to it that the financial sector works for the needy so that they can find their feet up the property ladder.
“Housing is an essential part of life,” he said, adding that “most of the people are forced to rent housing without the potential of acquiring it.”
He said as part of its objectives, Bifm is looking at solutions that can work for most of the people in the country citing, as an example, the insurance industry conference that was held during the second quarter of the year.
“Mortgage institution and Building Societies by their nature are restricted at lending to the high net earning brackets. And most of the people in Africa build on informal basis,” Senye said.
His comments were supported by presenters at the workshop who said there was a need to take a raft of radical measures in a bid to accommodate the low earning brackets into decent home-ownership market.
The pointed-out that some of the measures include the reform in land tenure, a responsive housing finance and the involvement of estate agents in encouraging home-ownership ÔÇôespecially among the poor and rural people.
Speaking at the same occasion, Lex von Rudloff, of Emang Professional Services, said though the banking sector is making huge profits in Botswana, the problem is that they tend to exclude the poor and the rural populace in the design of their products. However, he commended the Botswana Building Society (BBS), the lending mortgage financer for trying to accommodate as many people as possible in its drive to get Batswana housed.
“I would like to see BBS broadening their services to include more people,” he said adding that “so far 80 percent of its loan book is to residential property, while 10 percent of their mortgages are below P 50,000.”
He said given the restrictive nature of housing finance in the country ad hock housing finance seems to be the most common form of financing .
“There is an urgent need of a housing plan of between P 40,000 and P 100, 000 in this country,” he said, adding that micro-finance houses need to be encouraged to give loans geared towards housing loans.
He said some of the schemes that are being provided in the country are either suffering from poor management or the beneficiaries to do have other priorities. Government schemes, which could have benefited thousands of the public services officers, seem to have gone to waste. Only seven percent of the beneficiaries have used it for housing while the rest went to vehicle finance.
Ethel Matenge, of Home Finance Guarantors Africa (HFGA)ÔÇöa not for profit organization operating across the continent ÔÇô said there are countries which they are considering to enter into to help the less fortunate to meet the stringent banking requirements.
She said among the issues they are looking at is that HIV/AIDS victims should not be excluded from accessing housing finance.
Although the macro-economic situation in Africa is improving the banking sector seems not to be taking a keen interest in helping the poor.
“As a result of this, there are a lot of informal settlements which are housing the poor and the middle-class (in Africa). The rich house themselves because they do have access to finance, but, the majority of the people build on informal basis,” Mary Tomlinson, a researcher on homeownership issues, said.