The Zambian National Building Society (ZNBS) was established by the government of the Republic of Zambia on 24th December, 1970 under the Building Act of 1968. The society was formed with the mandate of mobilizing financial resources to invest in mortgages with the aim of increasing the country’s housing stock. With that in consideration, the ZNBS has brought about significant projects to this industry with the latest being the “Bwela Timange” mortgage promotion.
According to a report by the Zambia Daily Mail Limited on September 22, 2021, Zambia National Building Society (ZNBS) is set to disburse K80 million to support 160 mortgages at a reduced rate of 21 percent aimed at providing people with affordable housing finance.
In partnership with BSI Steel Limited, which will offer 25 percent discounts on all their products,.and Lafarge Zambia PLC, which will provide free delivery of cement, ZNBS on September 21 launched the ‘Bwela Timange’ mortgage promotion to run for six months effective September 21, 2021.
ZNBS Chairman, David Nama, said the institution will continue implementing its vision of providing low housing finance to carter for low-medium income earners. “We always look at which segment of our customers who are not accessing housing finance, hence developing these products through promotions to cater to everyone. This way, we are also supplementing government’s effort to reduce the housing deficit facing the country,” he said.
Meanwhile One Love Radio 104.1 FM on 21 September, stated that, speaking during the launch, ZNBS Managing Director Mildred Mutesa says the promotion is a special invitation to all Zambians to partner with ZNBS in an effort to build a home or buy a home on terms that are affordable.
In another post from the Daily Mail on 25 February, 2020, former United States of America President Jimmy Carter said decent housing is not just a wish, it is a human right.
The United Nations, on the other hand, has designated the first Monday of October of every year as world Habitat Day to reflect on the basic right to all adequate shelter. The day is also intended to remind the world that all people have the power and responsibility to shape the future of our cities and towns.
Therefore, that Zambia has a housing deficit of 1.5 million which may double to 3 million if no urgent interventions are made by 2030 is alarming.
The country has found itself in this situation because prior to the house empowerment scheme which was established by late President Fredrick Chiluba, most Zambians where comfortable not to invest in housing because the government provided free accommodation. Local authorities and institutions such as National Housing Authority rented out houses at cheap prices.
People would either go back to the land after retirement or buy a house. Had it not been for the housing empowerment scheme which saw government, local authorities and several companies sell houses to sitting tenants, the country would not have seen the unprecedented levels of investment in the housing sector and the housing deficit would have been a lot worse than it is now. Therefore, Zambians should actually be grateful to the late president Chiluba for the housing empowerment scheme because it was after that scheme that Zambians woke up from slumber and saw the importance of investing in housing.
Center for Affordable Housing Finance in Africa 2020 writes that the ability to access finance in Zambia is still low but mobile money is increasing financial inclusion. 10 out of 18 banks offer mortgages in Zambia. There are 129 non-banking financial institutions, including one building society and 33 microfinance institutions. Several factors make mortgages a difficult product i.e. high interest rates, lack of land titles, and resources of funding for banks.
The high interest rates and low average household incomes diminish housing affordability. Approximately 60% of urban households in Zambia rent and 40% own the homes they live in. when households build their own homes, they do so incrementally, as and when money is available. Most housing ownership is informal as only approximately 200,000 land titles had been issued in Zambia by 2018. Financing can be from short-term housing construction loans, family help, or other cash events.
In august 2019, the ‘buy a brick’ campaign by People’s Process on Housing and Poverty in Zambia (PPHPZ) launched with support from Stanbic Bank. The aim was to accomplish building 1000 housing units for the low income population vulnerable across the country.
Due to the pandemic, it is expected that the reduced rates of private home construction due to contractions in disposable incomes will result in construction declining by at least 5%.
Despite a weakening macro economy, there are major opportunities in Zambia’s housing finance market
- Apartment building will provide attractive returns for local investor
- Given the focus on self-build in zambia, housing microfinance using mobile money platforms could be a highly attractive opportunity for tech-savvy lenders
- Development finance institutions could consider funding smaller projects in incremental housing and back-yard housing.
