Paper long abstract:

In order to finance housing in Africa different approaches like subsidised public housing schemes, conventional mortgage loans or projects financed by international donors or NGOs, to name just a few, have been put up. So far, however, the magnitude of such efforts in Africa has been very limited. Microfinance for housing has developed to the dominant approach in the last decades in many developing countries of Asia and Latin America, while in Africa this concept is still in its infancy but highly propagated in order to upscale the quantitative output. However, considerable shortcomings of this approach are already obvious like the exclusion of tenants or the profit generation of banks out of the incomes of urban marginal groups.

Hence, so far vast majorities of urban residents in Africa have financed their shelter either by private savings or by relying on informal credits mostly provided by family members or friends.

In Dar es Salaam the recent city-wide programme to “Upgrade all Informal Settlements” aims to combine microfinance for housing with activities of infrastructure upgrading and land titling. Main target groups are low-income households, but whether these are willing or even able to invest parts of their limited income in housing and thus, whether housing microfinance is perceived as an adequate measure by the target groups will also be explored.