Scoping Rwandas Affordable Housing Sector and Its Financing

Scoping Rwanda’s Affordable
Housing Sector and its Financing

Contents 01: Homeowner /
incremental: rural &
peri-urban
1. Affordable housing in Rwanda 02: Backyard Chapter contents

landlord / unplanned
2. Six housing sub-markets settlement: urban • Household housing conditions
• Household demographics
• Household income sources &
3. Key issues for consideration
03: Household expenditure patterns
• Gaps in the value chain
landlord: urban • Demand-side profiles
• Affordability
• Overall sub-market characteristics
• Capacity
• Local interviews and case studies
• Economic impact
• Supply chain linkages
• Data 04: Employee
• Finance linkages
housing: urban
• Summary of challenges & opportunities
4. What can finance do? Conclusion & • International examples
Recommendations
05: Small-scale
5. References developer: urban
06: Large-scale
developer: urban
Overview of supply: Rwandan formal housing stock
A sampling of existing and pipeline housing supply revealed a somewhat diverse housing delivery 2007 - 2021
sector that is currently not achieving the outcomes anticipated by Vision2050’s housing aspirations.
Public Sales Access
Year Private Total no. Completed Ongoing Typology Price Rental Capital Subsidy
Developer Project Name Year Started Completed PPP Projects DUs DUs Mio FRW Markets
Large Developer with International Backing
Shelter Afrique / Remote Group Rugarama Park Estates 2019 paused Private 1 0 1,960 1 – 3BHK 12 - 35 Infrastructure from GoR
Shelter Afrique Rugarama Park Estates 2020 ongoing Private 1 0 840 1 – 3BHK 15 - 35 Infrastructure from GoR
Remote Group Masaka Fields Estate 2017 paused Private 2 0 260 1 – 4BHK 20 - 61 Infrastructure from GoR
Homart Group Phoenix, Rose Hill, Emerald, etc. 2019 ongoing Private 5 108 TBD 0 – 4BHK 42 - 117 ✓
KFW / GoR Green City Kigali 2020 ongoing PPP 1 0 1,650 1 – 3BHK TBD TBD
NextGen Developers Ubuntu Affordable Housing Project 2019 paused Private 1 1 120 2 – 4 BHK 18 - 55 No Infrastructure from GoR
Local Developers: + 100 DU
Umucyo Estates 2009 2012 Private 1 122 0 3BHK 70 No
Rwanda Social Security Board Vision City (Phase 1) via UDL 2013 2019 Private 1 504 3950 1 – 5 BHK 166 - 500 No - 60% for civil servants
Batsinda I 2007 2009 Private 1 250 0 2BHK 3.5 No - 50% for buyer
Batsinda II 2015 ongoing PPP 1 0 536 2 – 3BHK 40+ No AfriPrecast discount
Urukumbuzi Estates 2013 2016 Private 1 300 0 2 – 3BHK 28 - 40 No valley access for bricks
John Dubai Rusororo Estates 2016 ongoing Private 3 200 50 2 – 4BHK 20 - 60 No
Gatehill Estates I and II 2014 2016 Private 2 75 0 3BHK 60 No
Vincent Sekimondo Kanombe Estates 2017 paused Private 2 125 0 2 – 4BHK 45 - 56 No
Paul Karangwa Kigali Top Mountain 2007 2015 Private 1 100 0 4BHK 125 No
Local Developers: 50 - 100 DU
Oxypro Karibu Homes 2014 2016 Private 1 64 0 - 100 No
Geoffrey Byegeka Rubirizi Homes 2014 2016 Private 1 60 0 4BHK 60 No
DND Developers Triangle RE DND Development Phase I, II and III 2015 ongoing Private 3 50 14 2 – 4BHK 75 - 160 No
Local Developers: 10 - 50 DU
Real Contractors / CVLD Gisozi Apartments 2015 2016 Private 1 32 0 3 – 4 BHK 100 - 120 No
Thomas & Piron Sunset Estates 2010 2013 Private 1 23 0 3 – 5BHK 132 - 172 No
Real Contractors / CVLD Kabuga Estate 2009 2012 Private 1 79 0 3 – 4 BHK 80 No
Real Contractors Gacuriro 2007 2009 Private 1 6 0 4BHK 93 No
Recobuilders Ltd Kanombe Housing Project 2019 ongoing Private 1 6 13 3BHK TBD No
Bwiza Projects Limited Valleyview Estates 2019 ongoing Private 1 4 12 2 – 4BHK 75+ No
Solaria Solaria 2019 ongoing Private 1 0 42 2 – 3BHK TBD No
Source: Market studies by NIYIGENA JD 2021, DIEYE F 2013 - 2020

Overview of supply: Rwandan formal housing stock
A field study of housing supply revealed a somewhat diverse housing delivery sector that is 2007 - 2021
currently not achieving the outcomes anticipated by Vision2050’s housing aspirations.
Public Sales Access
Year Private Total no. Completed Ongoing Typology Price Rental Capital Subsidy
Developer Project Name Year Started Completed PPP Projects DUs DUs Mio FRW Markets
Large Developer with International Backing
FINDING 01
Shelter Afrique / Remote Group Rugarama Park Estates 2019 paused Private 1 0 1,960 1 – 3BHK 12 - 35 Infrastructure from GoR
Fewer than 5,000 DU
Shelter Afrique Rugarama Park Estates 2020 FINDING 03
ongoing Private 1 0 840 1 – 3BHK 15 - 35 Infrastructure from GoR
delivered through traditional SUPPLY SIDE ANALYSIS
Remote Group Masaka Fields Estate 2017 With the exception
paused of
Private 2 0 260 1 – 4BHK 20 - 61 Infrastructure from GoR
Homart Groupdeveloper-driven channels
Phoenix, Rose Hill, Emerald, etc. 2019 Batsinda I by RSSB,
ongoing no large- 5
Private 108 TBD 0 – 4BHK 42 - 117 ✓METHODOLOGY
KFW / GoR over a 10-year Green Citybe
period, Kigali 2020 1. Analyze formal and TBD informal
scale ongoing
housing project
PPP has 1 0 1,650 1 – 3BHK TBD
they local or international
NextGen Developers Ubuntu Affordable Housing Project 2019 ongoing Private 1 1 120 2 – 4 BHK 18 - 55 housing
No delivery channels
Infrastructure fromto
GoR
successfully delivered
Local Developers: + 100 DU affordable units below 15 determine Rwanda’s main
>> Housing being provided
Umucyo Estates 2009 million2012
FRW Private 1 122 0 3BHK 70 No
housing Submarket
by micro-developers
Rwanda Social Security Board Vision in
City the
(Phase 1) via UDL 2013 2019 Private 1 504 3950 1 – 5 BHK 166 - 500 No
2. Complete - 60% for civil servants
analysis of value chain
formal and informal sector
Batsinda I 2007 2009 Private 1 250 0 2BHK 3.5 No - 50% for buyer
for each submarket to better
Batsinda II 2015
>> Developers
ongoing
do not
PPP
view 1 0 536 2 – 3BHK 40+ No AfriPrecast discount
Urukumbuzi Estates 2013 affordable
2016 housing as
Private 1 FINDING
300 04 0 2 – 3BHK 28 - 40 understand
No delivery failures
valley access and
for bricks
John Dubai Rusororo Estates 2016 profitable despite
ongoing high
Private 3 200
Formal 50 2 – 4BHK
(built-to-code) 20 - 60
rental identify
No opportunities that will
Gatehill Estates I and II 2014 demand 2016 Private 2 housing is being offered at 60
75 0 3BHK promote
No inclusivity and
Vincent Sekimondo FINDING
Kanombe02 Estates 2017 paused Private 2 125 0 2 – 4BHK 45 - 56 No
formalization, while enabling
only the highest end of the
Paul Karangwa Delays in providing
Kigali Top Mountain 2007 2015 Private 1 100 0 4BHK 125 No
scale-up of formal delivery
income pyramid
Local Developers: 50 - 100 DUinfrastructure subsidies have channels
Oxypro delayed or stalled major
Karibu Homes 2014 2016 Private 1 64 0 - 100 No
3. Aggregate demand-side data
>> Loan conditions and
Geoffrey Byegeka developer housing projects
Rubirizi Homes 2014 2016 Private 1 60 0 4BHK 60 No
audit (EICV) with field study to
regulations do not favour
DND Developers Triangle RE in DND
the pipeline Phase I, II and III
Development 2015 ongoing Private 3 50 14 2 – 4BHK 75 - 110 No
develop more accurate profile of
development of rental
Local Developers: 10 - 50 DU actors in need of support
Real Contractors / CVLD
housing at scale
>>Gisozi
LackApartments
of implementation 2015 2016 Private 1 32 0 3 – 4 BHK 100 - 120 No
Thomas & Piron Sunset Estates
guidelines/instructions for 2010 2013 Private 1 23 0 3 – 5BHK 132 - 172 No
Real Contractors / CVLD
>>79Robust analysis of
subsidiesEstate
Kabuga 2009 2012 Private 1 0 3 – 4 BHK 80 No
Real Contractors Gacuriro 2007 2009 Private 1
informal
6
rental
0
housing
4BHK 93 No
Recobuilders Ltd Kanombe Housing Project 2019 ongoing Private 1
market
6
required
13 3BHK TBD No
Bwiza Projects Limited Valleyview Estates 2019 ongoing Private 1 4 12 2 – 4BHK 75+ No
Solaria Solaria 2019 ongoing Private 1 0 42 2 – 3BHK TBD No
Source: Market studies by DIEYE and NIYIGENA

Overview of supply: value chain mechanics
The strengths, weaknesses, opportunities and constraints of housing delivery in Rwanda are best understood through a value chain diagnostic that includes a
review of the chain’s primary finance-driven interventions.
The performance of the affordable Each housing sub-market performs Tenure is an important driver in the Pairing the demand-side data with the
housing sector is usefully understood differently, with key blockages (and identification and categorization of the value chain analysis reveals that many
with an analysis of the housing opportunities for attention) different housing sub-markets. In stakeholders are simultaneously
delivery value chain. From land happening in each link of the value Rwanda, housing value chains engage active in multiple housing value
assembly, to infrastructure, the chain. Finance is a key component of a multitude of stakeholders and chains. Understanding their roles and
regulations that govern the process, each link and is directly influenced by partners from both the formal and their contributions within and along
the design of the site and the units, blockages or risks that arise – again, informal construction and building the chain increases opportunities for
construction, offtake (sales or rental), differently in terms of each housing material sectors to deliver a mix of identifying potential financing
and then long term management and sub-market. owner-occupied and rental housing. mechanisms.
maintenance, each link in the chain
offers different challenges and
opportunities.
The IDP model village programme has been tremendously successful in structuring an efficient and effective supply chain in support of maximizing affordability.
The model offers useful lessons for private sector supply chains also seeking to target the affordable market.
INTEGRATED DEVELOPMENT PROGRAMME IDP SETTLEMENTS PER DISTRICT
Government of Rwanda Model Housing Villages AS OF MARCH 2021
TYPE I : MEDIUM DENSITY RURAL TYPOLOGIES
PROGRAM MISSION
Initiated in 2010, Rwanda’s Integrated Development
Programme (IDP Model Village) was designed to TYPE II : LOW-RISE MEDIUM-DENSITY PERI-URBAN TYPOLOGIES
promote proper human settlement in rural areas. In
2016, GoR extended this mandate, announcing that all
thirty districts nationwide should also accommodate an • Model villages constructed in 30 out of 30 Districts
urban community model village. As of 2020, • Typologies and settlement layouts designed and
settlements (both rural and urban) have been approved by Rwanda Housing Authority
constructed in all 30 of Rwanda’s Districts. • Eligibility criteria tailored to vulnerable households in
high-risk zones or low-income groups (as defined by
The successful delivery of more than 28,000 units in 222 Ubudehe categories)
settlements over a 10-year period is the result of an • 12,508 HH’s accommodated in Eastern Province, nearly
efficient and closely monitored supply chain involving TYPE III : HIGH-DENSITY URBAN TYPOLOGIES half of the national total
agencies and actors at all levels of government, from • The all-inclusive settlement model is designed to
Fig 1. Available typologies vary based on context
planning, design through construction. provide residents with access to health/social services
Rwanda’s IDP model village program is an important example of a robust and complete housing value chain. What lessons could it yield for the private sector?
CASE STUDY
IDP MODEL VILLAGE PROGRAM
Task: Consolidate land nationwide with Task: Ensure conformity with Rural Task: Build new urban and rural Task: Ensure new settlements are
budget allocated by the Central Settlement Policies, IDP Model Village settlements using local MiR materials maintained after occupancy
Government Program, Building Codes, National Land Key Decision Maker: Rwanda Key Decision Maker: Rwanda Housing
Key Decision Maker: MINECOFIN and Use Development Plans, HRZ Housing Authority Authority
MININFRA (budget) and RHA (site selection) resettlement strategy Implementation Agency: Reserve Implementation Agency: Local
Implementation Agency: Rwanda Housing Key Decision Maker: MININFRA / RHA Force (RDF part-time military service) communities under local authority
Authority and Districts Implementation Agency: RHA and Ruliba Clays /District supervision
Task: Plan, design and engineer code- Task: Allocate units to beneficiaries in
Task: Increase access to infrastructure
compliant model housing typologies rural communities and vulnerable
networks (water, electricity) by resettling
and settlement layouts groups living in HRZs
rural communities
Key Decision Maker: Rwanda Housing Key Decision Maker: Rwanda Housing
Key Decision Maker: RHA
Authority Authority / District
Implementation Agency: Utility Agencies
Implementation Agency: Rwanda Implementation Agency: Local
(WASAC, EUCL) under supervision of
Housing Authority authorities
Reserve Force and RHA
Rwanda’s IDP model village program is an important example of a robust and complete housing value chain. What lessons could it yield for the private sector? And
how might the private sector support and scale this effort?
FINDING 03 While the IDP programme has achieved a well-

FINDING 01 FINDING 02
Priority building material functioning value chain, as a 100% subsidised
Each link in the value chain is An experienced and
supply contracts are in place delivery programme, it is not sustainable. How
supported by a key policy skilled labour force is
with the country’s highest can the private sector be mobilised to take
initiative. The implementation available year-round to
capacity producers (e.g, these lessons forward and broaden the market
plan for those policies is fully undertake construction
Ruliba Clays, CIMERWA, that the programme targets, with the same
integrated into the annual activities
Prime Cement, etc.) efficiencies?
budgets and performance
contracts (Imihigo) of partner 1. Support the government in developing a
agencies
Task: at localland
Consolidate andnationwide
national with Task: Ensure conformity with Rural Task: Build new urban and rural national Task: Ensure
database new settlements
of pre-approved are
housing
levelsallocated by the Central
budget Settlement
FINDING 05 Policies, IDP Model Village settlements using local MiR materials typologies maintained
(underwayafter occupancy
via BRD with support
Government Program,
Typologies areBuilding
selectedCodes,
from NationalFINDING
Land 06 Key Decision Maker: Rwanda Key Decision Maker: Rwanda Housing
from WB) for use by private sector
Key Decision Maker: MINECOFIN and Use Development
a pre-approved Plans, HRZ
and pre- Housingas
Offtake is guaranteed Authority Authority
2. Streamline building material supply to
MININFRA (budget)
FINDING 04 and RHA (site selection) resettlement strategy
engineered collection of Implementation
beneficiaries are pre- Agency: Reserve Implementation Agency: Local
prevent shortages and reduce construction
Implementation Agency:
For many links Rwanda
in the value Housing Key Decision
designs, Maker:
so site layouts andMININFRA / approved
RHA and Force (RDF part-time military service)
fully subsidized communities under local authority and
costs – opportunity for digitisation
Authority andthe
chain, Districts
key decision Implementation
permitting can be fast-Agency: RHA by governmentand Ruliba Clays District supervision
maker also serves as the tracked 3. Partner with Rwanda Housing Authority to
implementation agency, pre-select beneficiaries from the National
which is critical in reducing Affordable Housing Eligibility Database
FINDING 08
Task: Plan, design and engineer code- Task: Allocate units to beneficiaries in
bottlenecks Task: Increase access to infrastructure (underway)
There has been no comprehensive
compliant model housing typologies review of rural communities and vulnerable
FINDING 07
networks (water, electricity) by resettling 4.inSupport
Beneficiaries have limited
the programme
and settlement layouts and its impact following groups living HRZs GoR in developing a more
rural communities sustainable self-funded
income
delivery, Maker:
Key Decision nor has Rwanda
an analysis been undertaken Key Decision Maker:
Housing Rwanda Housing maintenance model
Key Decision Maker: RHAso maintenance of the different impacts of the different
(groundskeeping and basic Authority Authority 5. Develop a hybrid subsidy-finance model that
Implementation Agency: Utility Agencies typologies developed. A key question is how
infrastructure repairs) are Implementation Agency: Rwanda Implementation Agency:lenders
supports Local in extending their credit
(WASAC, EUCL) under supervision of this housing will later integrate in the wider
Housing Authority authorities further down-market for housing purposes.
Reserve Force andfinanced
RHA by the government
residential property market.
2. SIX HOUSING SUB-MARKETS
01: Homeowner / incremental: rural & peri-urban
02: Backyard landlord / unplanned settlement: urban
03: Household landlord: urban
04: Employee housing: urban
05: Small-scale developer: urban
06: Large-scale developer: urban
Six housing submarkets
Segmenting the supply side into six housing submarkets that reflect the diversity of housing form and type and tenure across Rwanda.
SUBSTANDARD / INFORMAL FORMAL
Homeowner / incremental: Backyard landlord/ Household Landlord : Employee housing : Small-scale developer : Large-scale developer :
unplanned settlement :
rural + peri-urban urban urban urban urban urban
MORPHOLOGY
STRUCTURES
TYPOLOGIES
Mud brick Informal House Bungalow Housing Block Luxury Villa Apartments
Villa Rowhouse
shelter
COST
CON.
TYP.
FRW 60,000 – 70,000 /m2 FRW 75,000 – 160,000 /m2 FRW 150,000 – 350,000 /m2 FRW 150,000 – 350,000 /m2 FRW 400,000 – 650,000 /m2 FRW 550,000 – 920,000 /m2
PRICE
UNIT
SALE
TYP.
Owner-occupied Owner-occupied 20 - 50,000,000 FRW N/A 50 - 100,000,000 FRW 100 – 400,000,000 FRW
Homeowner / incremental: Backyard landlord / Household Landlord : Employee housing : Small-scale developer : Large-scale developer :
unplanned settlement :
rural + peri-urban urban urban urban urban
urban
SUB-MARKET
Owner-occupied single Housing constructed in Centrally located housing Housing constructed in Mid-range houses in Higher quality housing that
family homes built with dense urban settlements delivered as urban infill proximity of special small serviced estates remains unaffordable to
mud bricks, mud cob on plots with limited along spinal roads, with economic zones and built-to-code and eligible majority of the population.
and/or mud and mesh in direct access to formal better access to public manufacturing districts as for government Target market is largely
peri-urban and rural transport and transport routes. These designated in National subsidies. Common foreigners and diaspora with
DESCRIPTION
communities across the infrastructure. are the next step up after Land Use Master Plan, model among local a rental component for
country. Housing is Rudimentary housing self- unplanned settlements. District Development Plans developers with access to expats and consultants.
constructed incrementally, financed by owners and Many property owners and City Master Plans. finance. No rental Delivers the highest share of
with continuous upgrades built by local masons with develop units for rental as Dense multi-story housing options, direct sales rental units in the formal
provided through own- recycled materials made a way of supplementing block for workers (who may preferred in order to sector. Developer typically
labour or local masons. available by owner. Plots their income. Although travel back to the village on ensure a quick return. has access to foreign capital.
Homes are designed to in most popular the model fails to achieve the weekends). Ready Scale and affordability
serve as accommodation neighbourhoods typically economies of scale, it is access to public transport remain a challenge due
but also as storage for include multiple rental popular because it creates networks. Housing to weak supply chains,
business products rooms/units and may income-earning provided by companies high cost of capital and
(livestock, harvest, etc.). accommodate some opportunities for established in the industrial limited end-user finance.
commercial activity. entrepreneurial landlords. clusters.
Source*: Based on EICV 5

EICV 5 data has been used to segment households into the six submarkets to provide an estimate of the size of each submarket. The distinction between
submarkets can at times be blurry, for example the distinction between submarkets 2 and 3 (backyard landlords and household landlords), therefore segment sizes
are an estimate based on various criteria described below:
Homeowner / incremental: Backyard landlord / Household Landlord : Employee housing : Small-scale developer : Large-scale developer :
rural + peri-urban unplanned settlement : urban urban urban urban
urban
SUB-
MARKET
• Households in rural areas • Households in urban areas • Households in urban areas • Households in urban areas Small and large scale developers have merged due to their
• To identify ‘peri-urban’, • Live in “unplanned • Household income is less • Housing is provided by small size and difficulty in splitting them using the survey
households in urban areas settlements” than RWF 300,000 per employer data
SURVEY where habitat type is • OR housing conditions are month • Households in urban areas
DEFINITION "Isolated rural housing", sub-standard; have a pit • OR household income is • Must have a flush toilet
"Unplanned clustered latrine without a slab, above RWF 300,000 per • Walls made of oven fired bricks, cement bricks or ABTs
rural housing", or "Small main source of water is not month but there is no flush • Household incomes must be over RWF 300,000 per month
settlement“ have been piped or from a public tab, toilet or the walls are not
included walls are not cement made of oven fired bricks
bricks, oven fired bricks or or cement bricks
mud bricks with cement)
ESTIMATED
HOUSEHOLDS ~2.23 million ~0.38 million ~87,000 ~1000 ~10,500
% OF TOTAL HHs 82% 14% 3% 0.04% 0.4%
% OF URBAN HHs 9% 72% 17% 0.2% 2%
Source: Based on EICV 5
Urban areas in Kigali, Bugesera and Musanze have the largest proportion of developer housing. However, this still only makes up 3% or less of
households. Urban areas in Rubavu have the largest proportion of household landlords
Number of
BREAKDOWN OF SECONDARY AND SATELLITE CITIES BY SUBMARKETS urban
(Households in urban areas) households
Kigali 78% 18% 3% 302 867
Rubavu 62% 38% 40 371
Musanze 5% 68% 25% 2% 25 342
Rusizi 71% 29% 13 697
Nyagatare 5% 83% 11% 14 437
Muhanga 5% 91% 3% 1% 12 848
Huye 7% 90% 3% 10 290

Small
Bugesera 7% 61% 28% 3% 8 491 sample
size
Other 32% 62% 6% 95 470
1 – Homeowner/ 2 – Backyard landlord/ 3 – Household landlord 4 – Employer housing 5 & 6 – Small and large
incremental (peri-urban) unplanned settlement scale developer
ESTIMATED NUMBER % OF TOTAL HOUSEHOLDS % OF URBAN HOUSEHOLDS DOMINANT DWELLING TYPE MEDIAN MONTHLY
OF HOUSEHOLDS HOUSEHOLD INCOME
2.23 million 82% 9% ~ RWF 55,000

Mud brick shelters
01 HOMEOWNER / INCREMENTAL I RURAL + PERI-URBAN

Self-built home solutions
Image credits @Fatou Dieye

SUBMARKET 01: HOMEOWNER/ INCREMENTAL MAIN SOURCE OF WATER MAIN MATERIALS OF ROOF (TOP 3)
HOUSEHOLD OVERVIEW: 2.23 MILLION HH
(82% of all households)
Protected spring 44% Metal sheets/ corrugated iron 62%
Public stand/pipe 22% Local clay tiles 38%
LOCATION
Surface water, river or lake 16% Plastic/plywood/impermanent 0,04%
Rural and peri-
urban areas MAIN SOURCE OF LIGHTING MAIN MATERIALS OF WALLS (TOP 3)
Torch/Phone 51% Mud bricks 40%

7% of adults Electricity from EUCL 16% Tree trunks with mud 27%
moved to the
district within Solar panel 9% Mud bricks covered with cement 24%
the past 5 years
OCCUPANCY STATUS TOILET FACILITY MAIN MATERIALS OF FLOOR (TOP 3)
Owned 84% Pit latrine with solid slab 84% Beaten earth 78%
Rented 9% Median rent pm:
Pit latrine without slab 11% 19% share a Cement 17%
RWF 4,000 toilet facility
Dwelling provided free 6% No toilet whatsever 4% Hardened dung 3%
HOUSEHOLD SIZE LIVE IN OVER CROWDED MULTIPLE HOUSEHOLDS HOUSING TYPE

CONDITIONS* IN DWELLING
1 7% Single house 98%
Average HH size: 12%
2-4 48% 4.4 Group of enclosed dwellings 1,5%
3%
5+ 45% Multi-storied building 0%
Source: EICV 5. Note* Over-crowding is defined as more than 3 people per

sleeping room
SUBMARKET 01: HOMEOWNER/ INCREMENTAL PEOPLE
9.90 MILLION PEOPLE AGE GROUP HIGEST LEVEL OF EDUCATION
(83% of the total population) (ADULTS 16+)
56+ 9% 7%
Female
Tertiary 2%
GENDER 46 - 55 7% 6% Male
Secondary completed 3%
36 - 45 10% 9%
Some secondary 11%
Male 26 - 35 14% 14%
52% 48%
Female 16 - 25 17% 18%
At least some primary 64%
< 16 43% 47% None 20%
INCOME SOURCES (ADULTS 16+) INCOME SOURCES (HOUSEHOLDS)

OCCUPATIONAL ACTIVITY
PERCENTAGE OF PERCENTAGE OF
HOUSEHOLDS THAT HOUSEHOLDS THAT
Independent farmer 29%
21% of salary or wage RECEIVED AN INCOME RECEIVED A
% of HHs with at least one FROM PROPERTY REMITTANCE IN THE
Unpaid worker 26% earners are permanently
employed formally employed person or RENT IN THE PAST 12 PAST 12 MONTHS
Salary/wage (farm) 16% registered business owner* MONTHS
Salary/wage (private sector / non-farm) 10%

15% of self-employed are 13% 6%
Self-employed 6% 56%
registered (RRA/RDB)
business owners
Salary/wage (public sector) 2%
6% of owner
Not employed 12% households received
an income from rent
*Financial institutions typically require applicants to be formally employed or a registered
business owner in order to be granted a loan.
SUBMARKET 01: HOMEOWNER/ INCREMENTAL (2.23 MILLION HOUSEHOLDS) HOUSEHOLD CAPACITY
ESTIMATED MONTHLY HOUSEHOLD INCOME** (RWF)
EXPENDITURE PER CATEGORY
1M+ 0,1%
1% 1% 2%
900,000 - 999,999 0,0%
ALL
HOUSEHOLDS 56% 5% 5% 5% 4% 5% 3% 13% 800,000 - 899,999 0,0% Median monthly
700,000 - 799,999 0,1% HH income:
1% RWF 55,000
RENTERS
600,000 - 699,999 0,0%
(9% of 49% 9% 6% 7% 4% 3% 4% 3% 14% 500,000 - 599,999 0,2%
households)
400,000 - 499,999 0,4%
food rent (actual) water, electricity & other fuels 300,000 - 399,999 1,1%
transport home repairs housing (other) [1]
200,000 - 299,999 3,3%
education clothing communication
health other [2] 100,000 - 199,999 15,7%
50,000 - 99,999 34,2%
[1] Housing (other): furnishings, appliances, domestic cleaning and hygiene
[2] Other: Equipment maintenance, recreation, alcohol and tobacco, miscellaneous
<50,000 45,0%
Affordability calculations will assume that households

Percentage of households Percentage of all households
who spend 30% or more who spend 45% or more of
are able to spend the average rent percentage of 9%
expenditure on monthly loan repayments
of their income on rent their income on housing and
MEDIAN % SPENT ON
transport* HOUSING AND TRANSPORT* % of HHs that could afford an
unsecured RWF 50,000 loan 22%
6% (6 months, 20% interest)
0.7% 0.4%
% of HHs that could afford an
(6 months, 20% interest)
Source: EICV 5.
*Includes rent, home repairs, water, electricity, fuels for cooking and lighting, and transport
costs. **Income has been estimated using expenditure data. Amounts have been inflated
from 2017 to 2021.
SUBMARKET 01:
HOMEOWNER/ INCREMENTAL TYPICAL USER PROFILES
ALPHONSINE - BENEFICIARY SYLVESTRE - SUPPLIER JEAN PIERRE - CONSUMER
ALPHONSINE GENDER: Male GENDER: Male
GENDER: Female AGE: 44 AGE: 25
AGE: 72 OCCUPATION: Farmer OCCUPATION: Day
OCCUPATION: Retired INCOME: Below labourer
INCOME: (NA?) 60,000 /month INCOME: 50,000
LOCATION: Gisenyi month
LOCATION: Nyagatare
LOCATION: Byumba
BACKGROUND BACKGROUND BACKGROUND

Alphonsine is a widow, living with her adult niece and her Sylvestre is a farmer, married with 8 children, living in a house Jean Pierre is a mason from Byumba, who works as a day
family. Her house was given to her by the government after he built himself with mud bricks and mud floors. He lives in laborer. Some days he makes money, and other days he does
the war. She relies on government assistance, contributions the village of Gisenyi where he farms beans and maize on not; it is largely up to luck.
from her niece as well as remittances from her daughter who another farmer’s land. On the weekends, he makes additional
lives in Kigali. With no steady income, he is ineligible for a loan. He is newly
money by making mud bricks and blocks for neighbors.
married and while trying to save to acquire his own plot, he is
CHALLENGES CHALLENGES renting a mudbrick structure from another family that has
• Lives in a house that is structurally unsound upgraded to a larger home.
• Ongoing home maintenance needs with no disposable • Limited access to finance
income to finance renovations CHALLENGES
• No banking history or access to housing finance or OPPORTUNITIES / POTENTIAL SOLUTIONS • No real savings to get land and a house
personal loans
• Sylvestre is in the market redistribution zone – as a • Does not have a steady income so cannot easily join a
• Alphonsine is eligible to move to an IDP model village but
supplier, however, he has an income stream which could savings circle
likely she would not be able to accommodate her niece
and her family support a housing microfinance loan
• Off-grid infrastructure solutions as a small-business OPPORTUNITIES / POTENTIAL SOLUTIONS
OPPORTUNITIES / POTENTIAL SOLUTIONS opportunity
• Housing microfinance coupled with construction technical • If Jean Pierre could access top-up training he could
• Alphonsine is in the market redistribution zone integrate local construction companies like EarthEnable
• She would benefit from remittance products through assistance, could enable Sylvestre to rebuild his home with
appropriate foundations and assist in making improvements on people’s homes.
building material suppliers, so her children in the city could • Jean Pierre is young and could be engaged into buying land
pay for her home improvements • Digitised payments to create a visible track record of
business activity and enable access to finance
Source:
SUBMARKET 01: HOMEOWNER / INCREMENTAL
HOMEOWNER/ INCREMENTAL
RURAL & PERI-URBAN Mud Brick Shelter
Submarket 01 is comprised primarily of owner-occupied

single family homes built with mud bricks, mud cob, wood
and/or mud and mesh in peri-urban and rural communities
across the country. Housing is constructed incrementally,
with continuous upgrades provided through own-labour or
local masons. Homes are often designed to serve a dual
purpose: 1/ shelter and 2/ storage for business products
(livestock, harvest, etc.).
The homes supplied in this Submarket are considered
unplanned, substandard and/or informal – and therefore
ineligible for permitting – as a result of important gaps in the
value chain, namely:
• Ad-hoc neighbourhood and plot plans (regulations)
• Building materials and construction technologies not
recognized by the Rwandan Building Code or Rwanda
Standards Board (construction)
• Uncertified labour (construction)
• Limited access to water, electricity, sewerage
(infrastructure)
The Government of Rwanda’s IDP Model Village Program was
designed to address many of these weak links by creating a
high-performance supply chain for the delivery of housing
From 2019 - 2021, GA Collaborative, a Rwanda-based architecture and research firm conducted a detailed survey of solutions for Submarket 01. However, the sheer volume of
370 households from Ubudehe categories 1 and 2 in Masoro Sector, Rulindo District. Study includes dimensioned demand in this segment makes the study of alternative
drawings (see above) of all 370 surveyed households. Drawings were done in collaboration with students from the supply chain improvement mechanisms a necessity.
University of Rwanda School of Architecture. Full study to be published by GA Collaborative.
Source: General Architecture Collaborative

SUBMARKET 01:
INTERVIEW
SUPPLIER PROFILE Mud Brick Shelter
CURRENT PRODUCTS Key Takeaways

EARTHENABLE • Product rollout is limited to the capacity of each
Low-cost flooring and walling solutions • Earthen floors (~FRW 2,200 per square meter)
• Earthen plaster for exterior walls (~FRW 1,200 per franchisee (max 10 floors per month)
square meter) • Homeowners are engaged in seasonal work, therefore
additional cash is not available year-round to finance
CLIENTS SERVED SINCE 2015 home improvements
• 9,500 clients in 21 of 30 districts • Homes are currently deemed substandard and are
located in unplanned settlements in both urban and
PRODUCT DELIVERY METHODS rural areas, which makes them ineligible for permitting
• Decentralized business model with certified and they cannot serve as collateral for additional loans
franchisees attracting clients and offering basic • Products have demonstrable health benefits, however
services in their home districts. Varnish application they do not replace the need for improved structural
conducted by EarthEnable quality assurance teams. stability (i.e., a new house with proper foundation)
EarthEnable is a for-profit company based in Rwanda • Savings circles are common, typically 6 -8 persons in a
and Uganda with the sole purpose of improving the PRINCIPLE FINANCIAL PRODUCTS group band together to consecutively finance
health of the rural poor through the provision of • Clients can purchase floors room by room according upgrades on their homes
improved flooring and walling technologies. to their means. • As the company is not a financial institution, they
EarthEnable’s primary innovations are in their plant- cannot formally offer loan products
• EarthEnable finances 0% loans funded by grants to
based floor varnish, incremental finance packages and
their franchisees (technicians responsible for Opportunities
local distribution and sourcing networks.
installations) for the purchase of equipment (tools, • Provide low-cost financing to SACCOs and assist them
transport, etc.) for installation of floors and windows. in crafting low-interest micro-loans to qualifying
Adobe wall technology is still awaiting approval from
Rwanda Housing Authority for inclusion into the National • EarthEnable provides loans to cooperatives at a rate households (e.g., GIZ facilitating access to biogas
Building Code. Once approved, EarthEnable has plans to of 2,500 FRW per square meter (10% premium) for cookstoves and solar nationwide)
pilot the rollout of a 1-2m FRW house to the market. A their members to pay back over a period of 6 – 12 • Offer construction technical assistance linked with
key opportunity will be to engage with lenders on the months >> the cooperative serves as guarantor housing microfinance
revised building regulations (that require a masonry • Large farming cooperatives (e.g., Gatsibo District) with
• EarthEnable is piloting layaway payments through
foundation) and tie housing microfinance to this product 500 members that pay out twice per year could be
rotating savings groups.
to facilitate compliance with codes. supported to apply and receive credit to pre-finance
home improvements for their members.
Source: Interview with G. Datar, CEO and co-founder of EarthEnable

SUBMARKET 01:
INTERVIEW
SUPPLIER PROFILE Mud Brick Shelter
ENGIE (formerly Mobisol)

Off-grid solar power solutions Key Takeaways
• The company is very interested in penetrating the
urban market, however growth requires upfront
capital to purchase (and import) equipment bundles
of all sizes – this option was taken off of the table
during the pandemic
• Surprisingly, Mobisol’s rural business did not suffer
unduly during the lockdown. Rather, after a short
adjustment period, farmers resumed work in the field
and continued to make regular payments on their
systems.
ENGIE Mobisol offers state-of-the-art clean energy Opportunities

solutions for home and business. Plug and play products • Mobisol Engie has a network of clients who may not
are offered on a rent-to-own system with affordable pre- necessarily have a robust banking history, but now
payment plan managed via MTN Mobile Money. Solar have a paper trail showing that they are capable of
Home System sizes range from 50W to 200W. paying via installments
• Setting up a local supply chain would help alleviate
The company serves primarily underserved and rural off- costs provided demand were sufficiently high. In
grid communities. Productive use appliances allow addition to expanding their rural clientele, Mobisol
customers to establish solar-powered businesses. Engie would need to expand the marketing and
Through the creation of jobs, especially for women and distribution model to include clients across the region
youths, and the opportunity to build a credit history via and/or for other providers offering similar services in
customer financing, the company and its work also has country. This expanded market would finance
an important socio-economic impact. investments into the production facility.
Source: Interview with S. Kayitesi, MD of Engie Mobisol Rwanda

SUBMARKET 01:
CASE STUDY
RURAL & PERI-URBAN HOUSING PROTOTYPES Mud Brick Shelter
BBOXX GENERAL ARCHITECTURE COLLABORATIVE MIT, RHA & SKAT/SDC PROECCO

Tomorrow’s Rural Home – Vision for 2025 Masoro Sector EarthBag Rural Home Solution The Umusambi House: A peri-urban housing typology
Bboxx designs, manufactures, distributes and finances Polypropylene EarthBag structures are easy and quick to In 2017, students from the Massachusetts Institute of
decentralized energy solutions. In 2018, they unveiled a construct, thermally stable, rely on local materials, and Technology designed a prototype for a village house in
prototype for a rural home with healthy earthen floors, are structurally sound for one story buildings. In 2013, partnership with Rwanda Housing Authority with
solar-powered irrigation systems to improve farmer GAC-R constructed Rwanda’s first EarthBag home in construction technology support provided by Skat (via
productivity, clean cooking solutions and internet Masoro sector. Originally developed as a military bunker the Swiss Cooperation’s PROECCO project). The house’s
connectivity. All systems were designed to be PAYG (pay construction technique, woven polypropylene bags are narrow profile was designed to easily follow a hill’s
as you go) enabled, allowing customers to make digital comprised of three chambers that can be packed with natural contours and moveable interior StrawTec panel
payments through mobile money. excavated earth to form stable load-bearing walls. walls facilitate interior customization.
The home was constructed using all local materials

(rammed earth walls, bamboo ceilings, EarthEnable AFFORDABLE HUMAN NEEDS RWANDA Key Takeaways
floors) collected within a 10 km radius. In 2019, AHN (a US-based company specializing in • Packaging basic services with housing delivery can
rural water solutions) announced that it would enter increase accessibility to low-income households
The home reflects Bboxx’s strategy to broaden from • Upscaling and driving down costs requires investment
the affordable housing space with their design for an
being a provider of solar home systems to a multi-utility to ensure a functioning supply chain
EarthBag house inspired by their work in Nepal.
company servicing vulnerable households.
SUBMARKET 01:
SUPPLY CHAIN LINKAGES
Submarket 01 supply chain is pared down to the basics (land, construction and maintenance) and is characterized by a cyclical construction/maintenance pattern.
Land acquisition Despite the Construction Of the households Infrastructure Remote rural Maintenance The survey of
unplanned and/or informal nature surveyed in Masoro, 70.2% villages in Rwanda are not Masoro residents indicates that
of many rural and peri-urban indicated that they had constructed serviced by a formal grid. an overwhelming 95% of
settlements, Submarket 01 is their homes via own labour, while Consequently, the infrastructure households (350 of 370) report
characterized by high land another 13% indicated that it had chain link is minimized in this living in unfinished homes. It is
ownership and owner-occupancy been built for them by the Submarket. Fewer than 3% of the not surprising that 81.6% of
rates. In the case of Masoro Sector, government. surveyed households in Masoro owners report frequent spending
GA Collaborative reports that 91% reported having a water tap in on home repairs and upgrades
The self-build model results in the
of households were owner- their compound. Most (ranging from 5,000 – 20,000 FRW
biggest supply chain weakness of
occupied and could produce land respondents (68%) gather water per month).
this submarket: homes are built
titles with a mere 11 of the 370 from the public tap, followed by As expected, respondents ranked
without proper foundations or
homes surveyed (0.02%) being wells (15.7%) and springs (13.8%). walls and floors among their most
sturdy materials, leading to
occupied by renters. pressing repair needs. Few
repeated structural failures, most Forty households (10.8%) have an
typically at the level of the wall. electrical connection, thirty reported needing upgrades to the
Consequently, homeowners are (8.1%) have solar and the roof, likely due to the fact that
perpetually in the construction remaining 300 households use 95.4% of respondents had
phase. candles or torches for lighting. acquired used iron sheets.

SUBMARKET 01:
FINANCIAL INVESTMENTS
Financing of home construction and maintenance is done incrementally, according to the budget and needs of households. Limited financing packages available.
Land acquisition Land is typically Construction Cash installments are Infrastructure Most households Maintenance As with
acquired by homeowners via direct the most common financing collect water from the public tap construction, critical home
purchase (using savings or family method for home construction and and do not connect to electricity upgrades are typically made with
loans) or is inherited. In the case of improvements in Submarket 01. so expenses, if any, remain low. savings or small loans from family,
inheritance, larger parcels of land For those who access funds from friends or savings groups.
might have been subdivided to be SACCOs, they often find that the Although more than three
shared among family members. loan terms are onerous: land title quarters of households report
Even though the majority of this as collateral, minimum spending less than 20,000 FRW
submarket are farmers, few own membership of 3 -6 months, 24 – per home repair, this is an
the land on which they work and 36% yearly interest rate loan. extremely heavy burden for the
live, meaning that they do not have The incremental nature of population, where 96.4% of
farm land to use as potential construction payments is also a respondents report earning less
collateral for home improvements. result of the type of repairs than 40,000 FRW per month.
In the case of Masoro Sector, nearly needed, which have a limited time- Given that the money they spend
50% of households report they are span before needing to be done can only buy a temporary solution
wage farmers. again. (house remains structurally
unsound), it is imperative that
new supply chains be developed.

SUBMARKET 01: SUMMARY OF CHALLENGES & OPPORTUNITIES
The Land Use Poor access to Ad-hoc

CHALLENGES
No significant Significant need for

neighbourhood and Design is responsive Significant structural
Master Plan services – mostly challenges – owner- ongoing
plot plans are to incremental constraints create
suggests the need off grid. Water builders meet own maintenance
ineligible for construction need for ongoing
to relocate some collected from needs especially to the
permitting. This methods. Housing construction.
households off source, no formal floor and walls.
limits access to serves both shelter Primarily
land that could be sanitation, and very Constant
finance. and livelihoods foundation, floor
used for large scale limited energy maintenance
purpose and walls.
agriculture. supply. expense.
Loan products can be EarthEnable is a well targeted intervention

FINANCE-RELATED
Off-grid Product-specific housing

but needs to expand its operations to meet
OPPORTUNITIES
infrastructure structured as SME loans if microfinance. Building

coupled with the home improvement is the need. Support for franchises, and
material supplier-
product-specific for livelihoods purposes. product-specific housing microfinance.
provided HMF.
housing Building material supplier-provided HMF.
microfinance Construction technical
assistance can be coupled Housing microfinance-specific wholesale financier to support the
with loans to improve development of housing microfinance loan products, in urban & rural
housing quality. areas
SUBMARKET 01: INTERNATIONAL EXAMPLE
HOMEOWNER/ INCREMENTAL MECHANISMS TO EXTEND HOUSING MICRO-FINANCE IN RURAL AND PERI-URBAN AREAS IN SOUTH AFRICA
Mud Brick Shelter
RURAL HOUSING LOAN FUND
South African wholesale financier / apex fund Investors: SA Government, KfW, DBSA Key Takeaways
Grantors: KfW • The wholesale financier acts as an apex fund,
collecting investment capital from investors interested
Construction Technical Assistance
• Cost estimates / Bills of quantities in the opportunity but unable to engage directly with
• Sample Plans relatively small MFIs.
• Construction assistance / Building advice • Focused on lending for housing purposes in rural
Wholesale capital
areas, the RHLF investment officers develop specialist
MFI MFI MFI expertise that allows them to work with lenders and
MFI MFI MFI MFI build their capacity and outreach.
The Rural Housing Loan Fund (RHLF) was established in 1996 • The delivery of housing support services, directly from
by the South African government with support from KFW to Origination Servicing RHLF, means that lenders can rely on their clients
provide wholesale finance to microlenders for on-lending in • Marketing / • Disbursement having technical assistance in support of quality
housing-specific microloans to rural borrowers. RHLF outreach • Collections outcomes, without having to build that capacity in-
required that its client lenders ensure that all loans were • Loan sales • Delinquency Housing
used for housing purposes, and in this effort, supported house.
• Credit checks management microloans
them in building their housing microloan product spec. The • Savings groups • Tracking
• Building material supply retail outlets are a useful base
concomitant focus on housing and on rural was supported by from which to extend housing loans, enhancing
the specialist capacity within RHLF, and over years built the borrower affordability and thereby broadening the
lending capacity that was serving rural households in target market.
addressing their housing needs. In the five years before its
BUILD IT
closure in March 2019, it delivered 182 508 incremental South Africa
Opportunities
loans through nine housing microlenders. (See Build It—a building material retailer with more than 275 stores in
http://www.rhlf.co.za/wp-content/uploads/2019/09/RHLF-INTEGRATED-REPORT-
South Africa, Lesotho, Namibia, Swaziland and Mozambique— • Wholesale finance apex fund to provide capital and
FINAL-WEB-VERSION.pdf )
partners with housing microlenders to provide in-store housing housing support to MFIs, large scale farming
microfinance. In South Africa, Build It has four preferred lenders
RHLF played a key role in championing the housing cooperatives, and SACCOs specialise in lending
microfinance sector in South Africa. In addition to its lending that each store can choose to work with. This moves credit risk
unsecured loans for housing purposes.
activity, it provided capacity development support to away from Build It to the lenders and increases access to housing
housing microlenders, both financial and housing-related. It microfinance for households, while it also allows lenders to access
also developed a sample plan catalogue for lenders to share the market that is Build It customers and ensure that lending is
with their borrowers, and supported lenders in growing their specifically for housing . See www.buildit.co.za and
https://housingfinanceafrica.org/documents/case-study-9-build-it-case-study-housing-
markets. See www.rhlf.co.za microfinance-value-chains/
0.38 million 14% 72% ~ RWF 133,000

Informal and mud brick shelters
02 BACKYARD LANDLORD I URBAN

Urban
Image credits @Fatou Dieye

SUBMARKET 02: BACKYARD LANDLORD MAIN SOURCE OF WATER MAIN MATERIALS OF ROOF (TOP 3)
HOUSEHOLD HOUSING CONDITIONS
0.38 MILLION HH (14% of all households) Public stand/pipe 39% Metal sheets/ corrugated iron 93%
Piped to yard/plot 32% Local clay tiles 7%
LOCATION
Protected spring 13% Concrete 0,04%
Urban areas
MAIN SOURCE OF LIGHTING MAIN MATERIALS OF WALLS (TOP 3)
This submarket
represents Electricity from EUCL 75% Mud bricks covered with cement 58%
72% of urban
households Candle 11% Mud bricks 18%
21% of adults
moved to the
district within Torch/Phone 7% Tree trunks with mud and cement 10%
the past 5 years
Owned 40% Pit latrine with solid slab 89% Cement 67%
Rented 53% Flush toilet 4% 58% share a Beaten earth 27%
Median rent, toilet facility
Dwelling provided free 6% monthly: Pit latrine without slab 4% Clay tiles 4%
RWF 20,000

Average HH size: 11% 22%
2-4 52% 3.9 Group of enclosed dwellings 22%

sleeping room
SUBMARKET 02: BACKYARD LANDLORD PEOPLE
56+ 6% 4%
Female Tertiary 7%
36 - 45 9% 10%
Some secondary 14%
Male 26 - 35 19% 21%
50% 50% At least some primary 54%
Female 16 - 25 24% 24%
None 20%
< 16 38% 36%

OCCUPATIONAL ACTIVITY
PERCENTAGE OF
Salary/wage (private sector / non-farm) PERCENTAGE OF
37% HOUSEHOLDS THAT
48% of salary or wage HOUSEHOLDS THAT
RECEIVED AN INCOME
Self-employed 16% earners are permanently FROM PROPERTY
RECEIVED A
% of HHs with at least one REMITTANCE IN THE
employed formally employed person or RENT IN THE PAST 12
Independent farmer 8% PAST 12 MONTHS
registered business owner* MONTHS
Unpaid worker 7%
Salary/wage (farm) 29% of self-employed are
4% 13%
registered (RRA/RDB) 44% 54%
Salary/wage (public sector) 4% business owners
Not employed 24% 27% of owner

households received
an income from rent
Source: EICV 5. * Financial institutions typically require applicants to be formally employed
or a registered business owner in order to be granted a loan.
SUBMARKET 02: BACKYARD LANDLORD (0.38 MILLION HOUSEHOLDS) HOUSEHOLD CAPACITY
1M+ 0,6%
1% 1%
900,000 - 999,999 0,9%
ALL
HOUSEHOLDS 44% 8% 6% 9% 3% 8% 4% 3% 13% 800,000 - 899,999 0,5% Median monthly
700,000 - 799,999 1,4% HH income:
1% RWF 133,000
600,000 - 699,999 0,7%
RENTERS
(53% of 42% 15% 6% 8% 3% 6% 4% 3% 12% 500,000 - 599,999 2,3%
households)
400,000 - 499,999 3,9%
transport home repairs housing (other) [1] 200,000 - 299,999 14,6%
health other [2]
100,000 - 199,999 29,5%
50,000 - 99,999 25,0%
[2] Other: Equipment maintenance, recreation, alcohol and tobacco, miscellaneous <50,000 12,7%

Percentage of households
Percentage of all households
who spend 45% or more of
who spend 30% or more expenditure on monthly loan repayments
their income on housing and
of their income on rent MEDIAN % SPENT ON
transport* % of HHs that could afford an
HOUSING AND TRANSPORT* unsecured RWF 100,000 loan 55%
4% 3%
(12 months, 20% interest)
Source: EICV 5.
*Includes rent, home repairs, water, electricity, fuels for cooking and lighting, and transport
costs. **Income has been estimated using expenditure data. Amounts have been inflated
from 2017 to 2021.
SUBMARKET 02: BACKYARD LANDLORD TYPICAL USER PROFILES
SOLANGE – CONSUMER / SUPPLIER CANISIUS - SUPPLIER EMMANUEL – SUPPLIER / CONSUMER
GENDER: Male GENDER: Male
GENDER: Female
AGE: 39 AGE: 41
AGE: 55
OCCUPATION: Store owner, OCCUPATION:
OCCUPATION: Housekeeper
landlord Master mason
INCOME:
INCOME: 215,000 – 245,000 INCOME: 125,000
380,000 FRW /month
FRW /month FRW /month
LOCATION: Kiyovu
LOCATION: Gatenga LOCATION:
Kimisagara

Solange is a widow who works as a housekeeper for a Canisius is owner of a plot that is along a covered drainage channel. He has Emmanuel is a master mason earning 80,000 FRW per month
British family living in the posh Kiyovu neighbourhood of a small commercial business on his property but he makes the majority of in Kigali, where he lives during the week. He maintains a family
Kigali. She lives nearby in a formal house located in an his annual income from 3 tenant households. Base salary from shop: home in the village where his wife does subsistence farming
unplanned settlement that she shares with her sister and 90, 000 - 120,000 per month / Monthly rental income: 125,000 FRW and takes care of the family. In Kigali, Emmanuel rents a room
her sister’s family. Solange owns a plot with an older for 8,000 FRW per month (mud brick walls and floor, iron
CHALLENGES
sheet roof) from a backyard landlord in Kimisagara (near
house across town in Gisozi where she used to live with • The plot does not have direct access to a road, so it does not qualify for a Nyabugogo so he can take the bus back home on the
her husband and children when they were small. She now building permit and cannot be used as collateral for a bank loan weekends). Base salary: 80,000 FRW (top ups are
rents that home to 2 young bachelors, but the rental • His plot is getting crowded and so he is not able to continue adding more unpredictable but do happen) / Household salary (he and his
income does not allow her to finance repairs to the home. rooms or digging new pits. He must consequently pay to empty the current wife): 125,000 FRW/month
Employment : 180,000 FRW /Rental income: 200,000 FRW pit (78,000K) more regularly than in the past
• The new master plan requires him to build a multi-story unit for which he CHALLENGES
CHALLENGES does not have the means nor is his parcel big enough to comply
• Since he is located along a drainage channel in need of repair, the City’s • Their combined income must sustain 2 households
• Her current housing conditions in the informal • Backyard landlords are raising prices due to Covid
infrastructure upgrading program might expropriate a portion of his plot,
settlement are poor financial challenges
which is a main source of his monthly income
• Unable to find decent and affordable accommodation • Emmanuel could lose his unit or be priced out if his
• Any additions/changes to his structures must be done covertly for fear of
in the city close to her work, due to high demand and demolition by local authorities landlord is upgraded
high rent rates • No formal employment or rental agreement to
OPPORTUNITIES / POTENTIAL SOLUTIONS
guarantee income or protect against eviction
• In-situ housing upgrading program being piloted by the City of Kigali
• Solange is in the market redistribution zone for a and SDC/Skat might assist in replotting the neighborhood so that he
12,5M mortgage, but with her income could has a regularized plot and access to infrastructure
conceivably afford a lower-value, shorter-term • Emmanuel is in the market redistribution zone. His
• A regularized plot would allow him to offer this land as collateral for
mortgage, if the lender accepted all her income in masonry skills could allow him to get a job rebuilding
micro-finance loan to rebuild with his neighbors who could jointly
calculating her affordability. the neighborhood during upgrading exercises
sell-off land to access capital
SUBMARKET 02:
BACKYARD LANDLORD BACKYARD LANDLORD
URBAN Informal House Mud Brick Shelter
Sample plot from unplanned settlement study by
CoK and Skat/SDC PROECCO in Gitega Sector Submarket 02 consists of housing located in dense urban
(Nyarugenge District). Plot owner rents three 2- settlements on plots with limited direct access to public
room units that generate a total rental income of transportation and infrastructure networks. In most cases,
145,000 FRW per month. rudimentary housing is self-financed by owners and built by
local masons with a combination of improvised and recycled
materials. This Submarket is characterized by its higher
densities, due in large part to the own-to-rent profile of its
landowners. In other words, many property owners use their
plots to generate income from tenants. These so-called
“backyard landlords” construct basic structures alongside
their primary residences to accommodate rental households.
In a survey of 566 households in Gitega Sector conducted by
the City of Kigali and SDC/Skat PROECCO, 423 were tenant
households (74.7%) and 68.9% of landowners reportedly
receiving steady income from 1 or more tenants.
As with submarket 01, the homes supplied in this Submarket
are considered unplanned, substandard and/or informal. As
a result of important gaps in the value chain (infrastructure,
building and regulations), most plots and structures are
ineligible for permitting. Consequently, their efforts as
suppliers are undermined by a land use framework that
disallows this type of housing.
While it is clear that landowners benefit from a
neighbourhood's informality (overcrowding goes largely
unregulated), so too do tenants who establish unlicensed
commercial activity.
Study includes dimensioned drawings (see above) of 72 of the 186 plots surveyed (home to 2,533 individuals in 566
households). Drawings done in collaboration with students from the University of Rwanda School of Architecture.
Source: City of Kigali and SDC PROECCO / Skat Consulting

SUBMARKET 02:
BACKYARD LANDLORD
INTERVIEW
BUILDING MATERIAL SUPPLIER
Informal House Mud Brick Shelter
USED BUILDING MATERIAL RESALE COOPERATIVE CLIENTS

Nyarugenge District Homeowners in dense urban settlements at the centre Key Takeaways
of the city where security calls for more durable • The business has room for growth if additional capital
materials. The Cooperative also supplies many sites in were available to purchase more materials.
Secondary Cities requesting specific products since they • Business is vulnerable to lockdowns and any other
collect materials from high-end demolition sites in Kigali measures that stall construction activity but overall
where those materials may be available. the cooperative has greatly benefited from Rwanda’s
construction boom.
PRODUCTS (top 5 best sellers) • Business financed by private loan taken by
• Iron sheets at FRW 5,000 (85% market price) cooperative. Long-term scaling-up would require
• Metallic doors FRW 60,000 (120% market price) additional capital and additional supply-demand
• Wooden doors FRW 40,000 (80% market price) stability.
• Metallic windows FRW 15,000 – 18,000 (100% market • The Cooperative’s activities indirectly support the
The cooperative specializes in reselling used building price) proliferation of informal construction.
materials (brought directly to the shop or collected from • Iron bar FRW 7,500 (85% market price) • The cooperative’s profit margins are high, but at the
demolition sites across Kigali) to homeowners and expense of a population with few financial means.
renters looking to construct or make improvements to PRODUCT DELIVERY METHODS
their homes. • No transport offered. Clients must retrieve goods Opportunities
from warehouse themselves. • In many cases, the Cooperative serves as the primary
With the ongoing construction boom in Kigali, the contact/interface between backyard landlords and
cooperative has many opportunities to purchase building FINANCIAL FACILATION OFFERED TO BUYERS the construction industry. With some external
materials from demolition sites across the city. • Discount may be negotiated for clients who purchase support the Cooperative could bundle its materials
large volumes of building materials. However, there is with instruction manuals and sample designs to assist
Unlike other building material sellers in Rwanda, the no formal system of discounts or rebates. The in formalizing these constructions. Loan products
cooperative’s business is completely impervious to cooperative does not have any formal links to banks, could eventually be associated with these
border closures and import delays, however it is limited saving cooperatives or SACCOs so clients are expected construction bundles (e.g., pit latrine bundle, outdoor
by the available capital on hand to buy and stock new to pay in full at time of purchase. The cooperative kitchen bundle, etc.)
product and client purchasing power. reports that 80% of clients pay in cash, with the • If cooperative could access financing or partner with
remaining 20% paying via Mobile Money. an MFI, they could provide loans to clients
Source: Interview with Cooperative President

SUBMARKET 02:
BACKYARD LANDLORD
INTERVIEW
RENTAL HOUSING COOPERATIVE
RENTAL HOUSING COOPERATIVE CLIENTS

The Cooperative developed housing for two main Key Takeaways
Nyarugenge and Gasabo Districts, Kigali
audiences, single persons and small businesses catering • The Cooperative is pleased with new Kigali City Master
to the former Biryogo Market, both earning between Plan 2050’s focus on multi-family units as it favours
200,000 - 500,000 FRW per month. The cooperative held their rental business model and provides a supportive
advisories and meetings with their members in order to regulatory framework for expansion
analyse the market and select beneficiaries for their • Hikes in property and business taxes are quite
rental property business. The Cooperative does not do burdensome for small enterprises like theirs, especially
any advertising or marketing, all rentals are done via for their commercial properties where rental income
word of mouth in this close-knit community. has dropped due to the closure of the local market
• Demand is high for rental commercial and housing
PRODUCTS properties and the Cooperative maintains full-
Given their specific target audience, the cooperative occupancy year-round
offers two rental typologies: small 2-bedroom standalone • The Cooperative has not seen any development
The Housing Cooperative is located in proximity of the
houses for 100,000 FRW/month or commercial models or financing options that would allow them to
University of Rwanda’s Kigali city. For nearly 10 years, the
spaces/storage rooms in proximity of the market (since scale-up their operations given their current cash flow
cooperative has steadily acquired small properties, which
the renovation of the market area, rental prices have situation
are renovated and available for rental.
gone from 80,000 - 100,000 FRW per month down to
30,000 FRW) Opportunities
The cooperative currently owns and manages properties in
• Provide administrative and business planning and
Agatare and Biryogo. The neighbourhood is popular and
RENTAL AGREEMENTS development support to these small rental
the roads have recently been upgraded with World Bank
All renters have month-to-month contracts and must pre- management organizations
financing and so all units are occupied, providing an annual
pay at the beginning of each month via wire transfer • Provide construction finance loans for housing coops
return of nearly 3 million FRW. The cooperative estimates
that it will take them more than 10 years to repay their providing rental housing for low-income earners or
debts, which are in the form of personal and private loans. BUSINESS MODEL rebates on permitting costs.
There are no mortgages on any of the properties. They To date, the cooperative has purchased existing • Provide access to construction engineers and certified
wish to expand their business, but lack the capital to properties and converted them for rental. However, they masons to provide low-cost construction support
develop other properties that they own. have recently purchased a large tract of land in Kinyinya • Support measures for micro-developers catering to the
where they wish to build and sell homes. lower-end of the income pyramid, in terms of lower
statutory fees, access to specialist skills
Source: Interview with Cooperative President

SUBMARKET 02:
BACKYARD LANDLORD CASE STUDY
KIGALI CITY MASTER PLAN Informal House Mud Brick Shelter
KIGALI CITY REVISED MASTER PLAN 2050 KEY OBJECTIVES

Analysis of conformity with zoning designation Among the specific objectives of the 2050 plan are:
• the promotion of upgrading and redevelopment in high
land value areas;
• Implementation of sites and services approaches to
500 m2
accommodate low-income earners;
• Promotion of land consolidation and land pooling.
It follows that the Zoning Regulations include a designation

for a Medium Density Residential Improvement Zone (R2)
specifically designed for the upgrading of unplanned
settlements and/or redevelopment of urban renewal areas.
In total the 2050 Master Plan has dedicated 31.7 km2 for R2
In 2019 and 2020, the and provided schematic volumetric guidelines for
development that promote densification (see Fig. 1). The
2050 Plan also identifies SDC/Skat PROECCO’s 10-in-1
Demonstration House (see Case Study 02A) as the model for
R2 developments. Plan 2050 also includes provisions for
Inaugurated in September 2020, the revised Kigali City 61.9 km2 of Medium Density Residential - Expansion Zone
Master Plan 2050 introduces a more equitable, flexible, (R3) to allow for intensification and redevelopment of peri-
and incremental approach to city development, urban and green field areas for the development of
following UN-HABITAT principles and supporting the affordable housing.
achievement of UN Global Goals for Sustainable
Development. The Plan aims at being more inclusive by OPPORTUNITIES
facilitating a higher degree of social and economic The development directives and typologies for R2 and R3
inclusion, favouring small and large investors and have the potential to radically transform Submarket 02 by
facilitating the creation of a large variety of affordable facilitating formal mixed-use incremental residential
housing solutions, thereby supporting the growth of a development in some of the more dense pockets of the city,
healthy and well-balanced community. home to more than 70% of the urban population.
Fig 1. Medium Density Residential Improvement Zone (R2)
Source: Kigali City Master Plan 2050, Surbana Jurong

SUBMARKET 02
BACKYARD LANDLORD CASE STUDY
KIGALI CITY MASTER PLAN Informal House Mud Brick Shelter
Map of Kigali plots requiring readjustment prior to development
Plots zoned R2 below 500m2 Key Takeaway
Plots zoned R3 below 500m2 With limited developable land available (only 50% of
Kigali is buildable and 35% is already occupied),
densification remains a key tool for sustainable urban
R2 development. Although the new Master Plan Zoning
Guidelines are intended to accompany this
development process, a study of Zoning regulations
and plot sizes reveals that 40,233 plots (21,632 in R2
and 18,601 in R3) are beneath the minimum
threshold required to implement the recommended
R2
typologies. Therefore, significant exercises in land
readjustment will need to be conducted in order to
put the plan into full effect. Although these plots
represent only 10.85 km2, or 11.6% of the total area
allocated to R2 and R3, at densities above 80 DU/Ha,
this would have an impact on more than 100,000
households.
R3
Opportunity
• Financial support to low-income landowners in
paying for new ID cards and land titles to begin the
land readjustment process
• Free access to legal council for understanding the
R3 Condominium Law and how to consolidate plots
• Free access to design advice and pre-approved
housing schemes for planning new multi-family
structure
• Services could be offered pro-bono or financed by
AfR. To be delivered to audience via voucher.
Source: Kigali City Master Plan 2050, Surbana Jurong

SUBMARKET 02 CASE STUDY
BACKYARD LANDLORD
INFORMAL SETTLEMENT UPGRADING
Skat Consulting, SDC PROECCO and City of Kigali PROJECT OBJECTIVE

Demonstrate mechanism for consolidating individual Key Takeaways
Participatory upgrading in unplanned settlement
parcels for the construction of a multi-family code- Submarket 02 is instrumental in providing tens of
compliant building in an informal settlement. thousands of rental units to the market for lower-income
households every year. The Skat/SDC/CoK upgrading
METHODOLOGY project served as a first example for how to bring such a
The City of Kigali consolidated 3 parcels into a 600 m2 plot neighborhood into compliance with regulations (Master
adjacent to a primary access road in Kimisagara Sector, Plan and Building Code) in a cost-effective manner. Lessons
Nyarugenge District. Prior to demolition, plots were learned included:
evaluated by members of the Institute of Real Property • Property owners reported higher monthly utility costs as
Valuers (IRPV) to determine the value of their land and a result of formal water and electricity connections;
structures. Owners were given the equivalent cash value of • Own-to-rent remains dominant model of backyard
their properties in dwelling units in the new building. landlords: property owners preferred to move to
another informal house and rent upgraded units at a
TECHNOLOGY higher monthly rate to tenants from outside the
Skat Consulting used Made in Rwanda environment- neighborhood (see below table)
friendly ceramic bricks and blocks to build a RCC-reinforced
Comparison of monthly rental costs per dwelling unit
rowlock bond cavity wall load bearing structure with a
construction cost between 250-270 USD per m2, more 30% Typology m2 Existing Demonstration Bldg
(shared facilities) (self-contained)
cheaper than the common cement block and traditional
brick walling systems. Micro Studio 10 5,000
Studio 16 15,000 – 20,000 60,000
RESULT 1-bed 30 20,000 – 50,000
• Before transformation : 3 owner-occupied parcels with 5 2-bed 33 80,000 – 90,000
households in improved mud brick houses
3-bed 33-45 60,000 - 100,000
• After transformation : 10 dwelling units (built in 2
In 2017, Skat Consulting (via the Swiss Cooperation’s job phases) of 16, 33, 48 and 66m2. 3-bed 50-70 100,000 – 150,000
creation and construction industry transformation 3-bed 66 150,000
program) partnered with the City of Kigali to consolidate 3 Previous landowners reclaimed 4 buildings in the unit. The
plots and construct a storied multifamily building. other units were given to adjacent landowners to facilitate
the densification and land consolidation process.
Source: Skat Consulting Ltd. for SDC/PROECCO (images, concept, data)

SUBMARKET 02
BACKYARD LANDLORD
CASE STUDY
INFORMAL SETTLEMENT UPGRADING Informal House Mud Brick Shelter
City of Kigali, SDC and Skat Consulting PROJECT OBJECTIVE

Transform an existing unplanned settlement using the Key Takeaways
Participatory upgrading
techniques pioneered in the CoK and SDC/Skat PROECCO • Land consolidation facilitates the implementation of
demonstration house. large-scale infrastructure upgrades and eliminates the
need for costly and disruptive expropriation exercises
METHODOLOGY • Coordination between property owners and tenants
Through participatory meetings, the residents shall requires professional experience in mediation,
reach a consensus on the replotting of their parcels and negotiation and consensus building
distribution of units in new multifamily buildings. The • Rental tenure is insecure and imposing rent control
replotting shall facilitate the densification of the restrictions on landowners may be difficult, hamper
neighbourhood as per the Master Plan, which shall, in market development and/or disrupt the participatory
turn, create available land that can be sold to finance the planning process >> risk of gentrification is elevated
cost of upgrading (see diagrams below). unless measures are put in place to ensure that single-
room occupancy (SRO) accommodations remain
available at the same cost (i.e., extra units to be
owned/managed/maintained by an entity catering to
extremely low-income households
IMPACT • The legal fees related to land consolidation are costly
• Before transformation: 3 owner-occupied parcels with as are up-front fees for metering (water/electricity)
5 households residing in improved mud brick houses
• After transformation: 10 dwelling units Opportunities for AfR
• This land readjustment model could be paired with
innovative water/sanitation solutions that reduce
installation and operational costs
• Business support could be provided to a new entity
responsible for managing low-income rental housing
• Vouchers could be designed and given to households
to cover land titling and registration fees
Source: Skat Consulting Ltd. for SDC/PROECCO (images, concept, data)

SUBMARKET 02:
BACKYARD LANDLORD SUPPLY CHAIN LINKAGES
RURAL & PERI-URBAN Informal House Mud Brick Shelter
A reduced Submarket 02 value chain increases efficiency to maximize profits arising from informality.
Land acquisition Land in Submarket Construction Homes in this Infrastructure Informal Offtake EICV 5 reports that more
02 is a precious commodity for two submarket mostly adopt connections to infrastructure than half of the households in this
reasons: 1/ close to the city center rudimentary construction networks are common (splicing Submarket are renters. With little
and job opportunities 2/ land techniques for the erection of electrical cables) and direct to no disposable income, it
serves as mechanism for generating single story shelters. They are access to tapped water on plots is follows that landowners in this
income through unregulated mostly built piecemeal through not frequent. Managing waste is submarket make investments in
rentals. Parcels are small with own-labour or with assistance from the most common problem as building additional/rooms or
frequent plot readjustments and a neighbourhood mason. Materials there is no central sewerage structures because the demand is
subdivisions due to infrastructure are acquired in small quantities, system so landowners resort to high and offtake is guaranteed.
improvements (GoR drainage, typically via resellers. The informal pit latrines (with and without With no formal agreements in
electricity projects) or dividing nature of the structure is not the toilet apparatuses) on small most cases, renters are subject to
property among family members. biggest construction risk, however. overcrowded plots. When pit easy and frequent forced
Land cannot currently be sold at a Submarket 02 is frequently in high- latrines fill up, they can be evictions.
high price (because not serviced risk zones, where flooding and emptied or covered with a
and not accessible so it can’t be landslides can wreak havoc on cement slab for the construction
permitted) but it does provide the foundation-less mud brick homes. of another rental room.
owner with opportunities for
earning steady rental income.
SUBMARKET 02:
BACKYARD LANDLORD FINANCIAL INVESTMENTS
RURAL & PERI-URBAN Informal House Mud Brick Shelter
Submarket 02’s value chain is structured to capitalize on a strong rental market, driven by high demand and with expenditures aimed at facilitating offtake.
Land acquisition Land is typically Construction Not unlike Submarket Infrastructure Most households Offtake With little to no oversight
acquired by homeowners via direct 01, cash payments are the most have some form of connection from local authorities,
purchase (using savings or family common financing method for (either formal or improvised) to a landowners can increase the
loans) or is inherited. improving the home and/or adding utility (with the exception of number of households on their
new structures and facilities. waste treatment which doesn’t plot with relative ease, generating
exist). Water consumption is additional household income.
For plot owners who rent, financing expensive and is closely Attracting new tenants does not
upgrades/additions is far easier to monitored by property owners, require services from a broker, it
budget as payments/deposits for especially those who have is done largely via word of mouth.
materials can be made with rental tenants. Few property owners provide
income. Improvements to the rental contracts, which means
The same phenomenon observed
house/room have a direct that tenure security is challenging
with flooring upgrades are
correlation to rental prices (a room for renters. Nevertheless the
observed with infrastructure: as
with cement floor commands 2-3 Gitega survey showed a low
expected rental units with access
times more per month than a room turnover among household
to pit latrines with cement slabs
Sample home construction financing scheme with a mud floor). renters, as opposed to young
rent for more than those without.
for borrowers (courtesy Rapid Urbanism) bachelors who tend to rotate
in/out of this housing quite often.
SUBMARKET 02:
BACKYARD LANDLORD SUMMARY OF CHALLENGES & OPPORTUNITIES
BACKYARD LANDLORD - URBAN Informal House Mud Brick Shelter
Limited developable Self-financed, built

CHALLENGES
Informal electricity Backyard rental structures Single-storey, High demand for Poor construction
land available, so connections; poor are not permitted by the by local masons rental makes this a and limited access
rudimentary
densification is key. access to water; no land use framework; units with improvised & landlord’s market, to services creates
designs
However, 40,233 central sewerage. largely unplanned & recycled materials. with poor consumer ongoing
undermine
plots are beneath Limited direct substandard. In the face Incremental protection. maintenance needs.
opportunity
the minimum access to public of uncertainty, unlikely to construction
for increased
threshold required transportation & see significant household financed with rental
densities.
to implement the infrastructure. investment in housing. payments.
recommended Installation of water Significant informality Rental housing
typologies. & sanitation is includes unlicensed cooperatives lack
Many live in high expensive. commercial activity. capital to scale.
risk zones with risk Poor foundations.
of landslides.
FINANCE-RELATED
Household-level, in • SME opportunity to Demand for rental creates an important

OPPORTUNITIES
Regulatory framework to respond to

Skat-type land situ infrastructure reality of rental market: land use, support growth of income stream for existing residents:
consolidation and finance products to design standards, consumer protection. building material develop SME-type microloan & mortgage
densification. address high costs recycling cooperatives. products that recognise future income
of services Municipal-approved, sample plan catalogue • Housing microfinance streams as part of affordability. Link to
Vouchers to support installation and offered freely to micro-builders to support for specific planned Rwanda Mortgage Refinance
land titling metering affordable, quality structures. construction bundles. Company
requirements
BACKYARD LANDLORD / UNPLANNED LAND-BASED FINANCE FOR INFORMAL SETTLEMENT UPGRADING IN SENEGAL
Main components of Slum Upgrading Initiative

Key Takeaways
• Apartments range from studio units (m2), 1 bedroom
(38 m2), 2 bedrooms (49 m2) to 3 bedrooms (57 m2).
• A land-readjustment scheme so the land paid for
• Residents pay community fees of between 15-40 Euros
the units.
for 15 years after which title is transferred.
• A sensitisation campaign was run in order to inform
• Phase 1 (Slum upgrading) comprises 210 free homes
the slum inhabitants and to raise awareness
with average unit sizes of 43m2and a net construction
regarding the ways of life that will change.
cost of $350 /m2.
• Construction Financing is required to drive
• Phase 2 comprises 200 market housing units and 3000
economies of scale
sqm. Unit sizes range from 44m2 to 98m2. Construction
• A training program for 215 craftsmen, semi-skilled
costs ranging from US$650 to $US 700/m2.
Over the last two decades, Senegal’s urban population workers and service providers of Baraka to enhance
has doubled with Dakar driving urban growth. This urban their capacities in strategic management and
Baraka Slum Redevelopment Model
growth has been accompanied by urban infrastructure marketing).
• 15000m2 of land transferred to SOREBA (non-profit
and service delivery challenges. The Cité Baraka project,
project company)
is an informal settlement upgrading initiative that is Opportunities for Rwanda
• 2/3 of land for redevelopment for previous dwellers
providing housing to 210 families (1600) residents living
(1,600 people, 210 housing units in 11 mid-rise
in Baraka, located in the capital of Dakar, drawing on • To explore the applicability of land based financing
buildings).
land values to support housing construction costs. mechanisms such as cross-subsidies from
• 1/3 land for 200 market units. Developer builds market
commercial development.
units only after delivering units to previous slum
The project officially started in March 2018 with the • Developing construction finance products with
dwellers.
construction of the first six buildings. The project is favourable terms targeted towards large scale
• Donor Funding to help finance housing, education
driven by German based YOU Stiftung, and is supported developers and small scale contractors.
facilities and forty-seven stores, businesses, and
by Orascom Group (technical and financial partner) and
workshops were all made a reality. Benefitted from
its subsidiary Casa Orascom. Various other donors and
donor funding Casa Orascom (2021).. https://www.hdb.gov.sg/
stakeholders assist in different capacities.
• A blockchain based payment management solution, to http://www.casaorascom.com/home.htm
allow for traceable community fees and rental payments Casa Orascom (2019).AUHF Conference 2019.
The project has been supported by the Senegalese http://www.auhf.co.za/wordpress/assets/2019/11/Shah_HOW-LOW-CAN-WE-GO-
• A residents application will tie in security, Identification WITH-AFFORDABLE-HOUSING_am.pdf
government, with the Ministry of Urban Renewal and
and payments.
Living Environment monitoring the project.
87,000 3% 17% ~ RWF 252,000

Bungalow
03 HOUSEHOLD LANDLORD I URBAN

Mostly code-compliant homes built by property owners for sale or rental
Image credits @Irfan Shakil, Khulna University, Bangladesh

SUBMARKET 03: HOUSEHOLD LANDLORD MAIN SOURCE OF WATER MAIN MATERIALS OF ROOF (TOP 3)
87,700 HOUSEHOLDS (3% of all households)
Piped to yard/plot 59% Metal sheets/ corrugated iron 98%
LOCATION
Piped into dwelling 7% Industrial tiles 0,2%
Urban areas
This submarket
represents Electricity from EUCL 94% Mud bricks covered with cement 79%
17% of urban
households Candle 3% Oven fired bricks 15%
Torch/Phone 2% Cement bricks 5%
Rented 50% Flush toilet 22% 42% share a Clay tiles 17%
toilet facility
Dwelling provided free 5% Pit latrine without slab 0% Beaten earth 8%

Average HH size: 6%
18%
4.2 Group of enclosed dwellings 20%
2-4 46%

sleeping room
SUBMARKET 03: HOUSEHOLD LANDLORD PEOPLE
56+ 4% 3%
Female
Tertiary 15%
36 - 45 9% 12%
Some secondary 16%
Male 26 - 35 22% 21%
52% 48%
Female 16 - 25 29% 24%
< 16 31% 34% None 14%
Salary/wage (private sector / non-farm) PERCENTAGE OF

40% PERCENTAGE OF
HOUSEHOLDS THAT
Self-employed 15% earners are permanently % of HHs with at least one RECEIVED AN INCOME
RECEIVED A
employed formally employed person or FROM PROPERTY
REMITTANCE IN THE
Salary/wage (public sector) 8% RENT IN THE PAST 12
registered business owner* PAST 12 MONTHS
MONTHS
Independent farmer 5%
Unpaid worker 42% of self-employed are
4%
registered (RRA/RDB) 68% 20% 58%
Salary/wage (farm) 1% business owners
Not employed 28% 34% of owner

households received
an income from rent
SUBMARKET 03: HOUSEHOLD LANDLORD (87,000 HOUSEHOLDS) HOUSEHOLD CAPACITY
1M+ 5,8%
2%
900,000 - 999,999 1,9%
ALL
HOUSEHOLDS 32% 8% 5% 13% 1% 11% 4% 3%1% 19% 800,000 - 899,999 0,8% Median monthly
700,000 - 799,999 4,5% HH income:
2% RWF 252,000
600,000 - 699,999 2,1%
RENTERS
(9% of 31% 16% 4% 11% 0% 8% 4% 3%1% 19% 500,000 - 599,999 6,2%
households)
400,000 - 499,999 8,7%
food rent (actual) 300,000 - 399,999 12,8%
water, electricity and fuels for cooking / lighting transport
home repairs housing (other) [1] 200,000 - 299,999 19,0%
education clothing 100,000 - 199,999 22,4%
communication health
other [2] 50,000 - 99,999 13,8%
[1] Housing (other): furnishings, appliances, domestic cleaning and hygiene <50,000 2,1%
[2] Other: Equipment maintenance, recreation, alcohol and tobacco, miscellaneous
Percentage of all households Affordability calculations will assume that households

who spend 30% or more
who spend 45% or more of are able to spend the average rent percentage of 16%
their income on housing and expenditure on monthly loan repayments
transport*
HOUSING AND TRANSPORT* % of HHs that could afford an
unsecured RWF 1 million loan 16%
8% 7%
RWF 12.5 million affordable 8%
mortgage loan
Source: EICV 5. (20 years, 11% interest)
*Includes
**: rent,
Financial maintenance,
institutions water,
typically electricity,
require andto
applicants transport costsemployed or a
be formally
**Income business
registered has beenowner
estimated using
in order toexpenditure
be granted adata.
loan.Amounts have been
***Calculations inflated
assume thatfrom
2017 to 2021.
households will spent 30% of income on loan repayments and no deposit is paid
SUBMARKET 03: HOUSEHOLD LANDLORD TYPICAL USER PROFILES
JEAN MARIE VIANNEY - CONSUMER PAUL - CONSUMER VINCENT - SUPPLIER
GENDER: Male GENDER: Male GENDER: Male
AGE: 29 AGE: 26 AGE: 62
OCCUPATION: OCCUPATION: OCCUPATION: Retired,
Economist Customer service landlord
HOUSEHOLD INCOME: representative INCOME:
1,200,000 FRW /month INCOME: 3,200,000 FRW /month
LOCATION: Gisozi 300,000 FRW /month LOCATION: Kacyiru
LOCATION: Gisozi

Jean Marie Vianney is newly married and is in his sixth year as Paul is single and works as a customer service representative Vincent is a retired agronomist who lives with his wife and youngest
a economist at the MasterCard Foundation. He lives in Gisozi, for Airtel. He shares a modest 3-bedroom home with another son in a villa in Kacyiru. Vincent and his wife own 8 parcels (400 –
where he and his wife rent a 3-bedroom house, while saving bachelor that is located in a modernizing neighborhood in 800 sqm) of land in Gisozi, Kabeza & Kimironko. Vincent works
to purchase something of their own. The couple’s HH income Gisozi. His share of the rent is 110,000 FRW/month. The home closely with his cousin (a master mason from Muhanga) to renovate
could easily finance a home in Submarket 05, but they have has a connection to water and electricity, but there is no water and/or build structures on these plots and rent them out to young
struggled to find an appropriate mortgage product. heater and it does not have direct access to roads, which is an professionals or small families. Vincent does not list these
inconvenience to Paul. properties with a rental agency. He is able to get tenants via word
Combined HH income: 1,200,000 FRW / Rental spending:
of mouth. Household monthly income: pension? / Monthly income
300,000 FRW / Budget for new home: 55,000,000 FRW CHALLENGES from rent: 3,200,000 FRW
CHALLENGES • Despite having enough money for a down-payment, Paul CHALLENGES
• Although affordable in terms of rent and built to code, the would not be able to afford mortgage repayments for even • Property taxes are rising
plan was done by the mason and so the layout of the the cheapest newly built house, given the high interest rates • Some of Vincent’s plots are in areas that require densification as
rooms is poor and the house is uncomfortable to live in, • Does not find new formal properties on the market that can per the master plan. This is not financially advantageous for
hence his search for properties in Submarket 05 and 06 meet his 15 million FRW budget and that are within a 20km Vincent so he has stopped making upgrades on some properties,
• Landlord raised the rent during the pandemic radius of his place of employment in Kigali City Center lest he have challenges from the authorities who will wish him to
• Struggled to access a mortgage due to the contract nature comply with new regulations
OPPORTUNITIES / POTENTIAL SOLUTIONS • Vincent lists the properties in the names of his wife and kids to
of his and his wife’s employment
• Paul has 3m FRW in savings and a small plot to sell avoid detection from RRA
OPPORTUNITIES / POTENTIAL SOLUTIONS OPPORTUNITIES / POTENTIAL SOLUTIONS
• With a steady job, Paul has access to a personal loan through
• Jean Marie Vianney has a plot that he purchased when he was his bank. • With a steady rental income, Vincent does not need a loan to finance
still a bachelor that can be used as part of a down-payment to a • Paul is in the market development zone for a mortgage lending the upgrades, however with capital & incentives to encourage
bank product which would recognize his additional income sources. densification, he could assist his children in growing his development
• Jean Marie Vianney is in the market enablement zone: mortgage With a deposit from his savings and the sale of his plot, he & landlord business further, perhaps passing it on to his son.
design could be revised to accommodate contract employees, might afford a 15m FRW home. • Digitised payments to create a visible track record of business activity
and enable access to finance
through a rent-to-buy arrangement
SUBMARKET 03
HOUSEHOLD LANDLORD HOUSEHOLD LANDLORD
URBAN
Bungalow
Submarket 03 is the most diverse of the 6 submarkets. New homes

in this submarket consist primarily of single-family homes built in
Remaining pockets of central neighbourhoods delivered as urban infill along spinal roads
informality within a rapidly in formerly unplanned neighbourhoods. This development pattern
transforming neighborhood. contributes to highly mixed neighbourhoods, where pockets of
The 20% of grouped dwellings informality persist on plots without direct road access. These
(EICV5) would likely be found neighbourhoods are popular with young families as the housing
JEAN MARIE VIANNEY in enclaves like these. stock is largely older-generation single-family homes rented out at
an affordable price, hence the 50% rental households reported in
EICV5.
Submarket 03 includes heterogenous housing clusters where
individual property owners build and renovate in accordance with
PAUL their means and self-interest. In that manner, this Submarket is just
VINCENT the next step up from unplanned settlements when it comes to
understanding the motivations behind its growth and development.
Landowners invest in home Although this model of housing delivery fails to achieve economies
improvements/upgrades on of scale, it remains immensely popular because it creates income-
plots with direct road/public
earning opportunities for entrepreneurial landlords.
transport access.
Although the demand side data audit may hint at some overlap
between Submarkets 02 and 03, the value chain analysis argues in
favour of making a clear distinction between the two. Not only are
the majority of the homes in Submarket 03 constructed with formal
materials with mostly formal utility connections, new structures are
permitted and largely follow city development guidelines.
An 2021 aerial view of Kigali’s Gisozi Sector depicts a popular neighbourhood where single-family homes
(new, renovated and/or used) are highly solicited by single professionals and young couples.
Image credits @Google Earth Pro

SUBMARKET 03 INTERVIEW
HOUSEHOLD LANDLORD
HOUSING SUPPLIER PROFILE
Bungalow
MASTER MASON CURRENT PRODUCTS Key Takeaways

Southern Province The majority of the mason’s work is in the construction of • The mason has no formal job description as he plays the
standalone Single Family Homes (3 – 4 BHK) in Rwanda’s role of contractor, construction manager and quality
Southern Province. His homes typically fall between 8 – assurance supervisor on any given project
10 million FRW and 20 – 30 million FRW. Although the • Engineering plans are primarily to support the permitting
homes do not qualify for subsidies offered through the process, amendments to the floor plans are often made on
Prime Minister’s Instructions for affordable housing site as directed by the property owner and engineer. This
(density and size), the homes do fall within the cost type of “in-situ customization” requires him to remain
bracket defined as affordable in Rwanda: below 35 flexible throughout the construction process, limiting his
million FRW. ability to establish a firm construction schedule or to make
financial projections to grow and/or formalize his business
SCOPE OF SERVICES OFFERED • Despite the homes being considered formal by the
• Recruitment of contracting team authorities, the construction process is largely informal as
• Building material procurement (construction mgmt) he is not licensed and neither he, the site nor his workers
An interview was conducted with a master mason who • Site supervision (including stock management) are insured.
• Quality assurance • Common perception is that this quasi-formal construction
has been active in the construction of homes in Rwanda
for nearly 20 years. He has established relationships process eliminates high margins and guarantees
FINANCING affordability.
with several local engineers, who, once the building is
As is typical for master masons working in Submarket 03,
permitted, hand off the responsibility for construction
he is paid for his services directly by the homeowner. He Opportunities
and site management to him (via the homeowner). On
does not have capital to advance payments to day • Provide low-interest rate business loans to mason so that he
average, the mason can build 3 – 4 homes per year, and
labourers or to make material purchases, so depends on may upgrade his construction tools and/or get access to
often works on more than 1 site at a time.
cash disbursements from the property owner in order to
training courses for certification
carry on with his activities. Consequently, there are often
Although he manages a crew of up to 35 masons, he has • Provide business development and accounting training to
building material supply shortages on site, materials may
no formal contracts with these employees and does not mason so that he formally registers his company
be of poor quality and/or work may be interrupted due
have a formally registered company. • Develop construction financing and insurance products that
to cash limitations. Unsurprisingly, he lists lack of
directly respond to the needs of small contractors
construction financing (on both his and the client’s side)
• Digitise the building material supply chain to assemble
as the primary hurdle to scaling up his business.
supply and create a financeable proposition.
Source: Interview with Master Mason working in Southern Province

SUBMARKET 03
HOUSEHOLD LANDLORD
INTERVIEW
Bungalow
CURRENT PRODUCTS
GREAT STRENGTH CONSTRUCTION COMPANY Great Strength owns three machines with which the Key Takeaways
Formerly Vuba Bricks company produces Interlocked Stabilized Earth Blocks for • Working all along the value chain allows Great
the construction of single-family homes at an average Strength to offer an attractive and competitive
cost of 15 – 25 million FRW per home. home building package to clients. Rather than
The company can either produce the building materials taking a margin on every link in the chain, one
themselves on-site or rent out the machine to clients to margin on the entire service is taken, which
produce the materials with Great Strength simply doing reduces the overall cost of housing.
the construction. • No official mechanism in place to ensure that the
ISEB meets the standards (i.e., correct soil mix,
SCOPE OF SERVICES OFFERED etc., proper resistance), particularly in the case
• Design (house and/or housing development) where the property owner self-produces the
• Permitting blocks
Great Strength Construction Company is a Kigali-based • Building Material Production
contracting firm that has been in operation for 3.5 years, • Home Construction Opportunities
during which time they have successfully constructed • Quality assurance • Great Strength’s business model is based on the
over 25 affordable homes. owner’s spirit of entrepreneurship and
FINANCING innovation. The owner would like to do more
The company was started by a University of Rwanda The costs for purchasing the ISEB machines was 100% (i.e., self produce more building materials) but
graduate engineer (recipient of this year’s Innovation borne by the entrepreneur. Packaging services along the lacks financial backing.
Award). The business model consists of providing a entire value chain (design through construction) allows • Opportunity to create innovation fund for local
maximum number of services along the supply chain Great Strength to better plan/budget for contingencies. builders with a proven track record for delivering
from planning, design, building material production and It also allows them to offer small rebates to clients who quality homes within the affordable range.
construction. build more than one house at a time. These rebates are • Better construction loan conditions for the
offered during the negotiation process and do not follow property owner would mean less risk for Great
any prescriptive formula. Although Great Strength’s Strength Construction and would improve their
business model limits their financial exposure (no delivery capacity.
piecemeal budget), it does not make them completely
impervious to client’s budget constraints.
Source: Interview with CEO of Great Strength Construction Company

SUBMARKET 03
HOUSEHOLD LANDLORD INTERVIEW
Bungalow
CURRENT PRODUCTS / SERVICES Key Takeaways

MODERN BRICKS LIMITED • Stabilized Earth Blocks (SEB) • Modern Bricks Limited is delivering affordable homes
• Construction services to the market, but at an incredibly limited scale, they
• Single-family homes between 15 – 30 million FRW also design-build
• The company’s design-build model is not unlike the
SCOPE OF SERVICES OFFERED backyard landlords with the exception that the
• Design (house and/or housing development) process has been formalized and meets current
• Permitting building standards
• Building Material Production • The technology does require close supervision to
• Home Construction ensure building material mix meets the standard
• Quality assurance • Financing aside, the business model is based on the
• Sales single-family home typology, which is no longer the
preferred building typology in either the new city
Modern Bricks Limited is a building material producer FINANCING Master Plans or the National Land Use Devt. Plan
and home builder in business for nearly 3.5 years. To Modern Bricks Limited self-financed the purchase of
date the company has constructed 15 homes. machines for the production of SEBs using a combination Opportunities
of savings, personal loan and sale of other assets at a • Provide financing for innovation and investments into
The company business model has three main revenue cost of 35 million FRW. In its role as micro-developer the construction technologies, possibility to adopt a
streams: 1/ production and sales of stabilized earth company also make investments into the purchase of similar approach as Enabel (former Belgian Technical
blocks, using a Hydraform machine; 2/ construction of land for the construction of single-family homes that are Cooperation) who is supporting NIRDA in offering
homes for clients; and 3/micro-developer of affordable put on the market between 15 and 30 million FRW. investment support in 4 building material value
housing. Given the high demand for affordable housing Despite providing homes in the cost bracket identified by chains
units, the company CEO would like to expand his work as National Policies as “affordable,” the company is not • Work with Rwanda Standards Board and Rwanda
a developer (i.e., build more homes at a larger scale) but eligible for subsidies as it does not yet produce at scale. Housing Authority to develop a building materials
is constrained by limited financing and risk-management Modern Bricks assumes the responsibility for the offtake marketplace, where building materials can be fast-
options. themselves, offering a small rebate to those buyers with tracked through testing and approvals and sold in
the means to quickly finance the purchase of a home. bulk to builders – important digitization opportunity
• Construction finance – debt and equity – to grow the
capacity to deliver at a greater scale
Source: Interview with CEO of Modern Bricks Limited

SUBMARKET 03:
HOUSEHOLD LANDLORD VALUE CHAIN LINKAGES
HOUSEHOLD LANDLORD - URBAN
Bungalow
Submarket 03 is a formal version of the owner-version seen in Submarkets 01 and 02, with rental income driving design, offtake and maintenance decisions.
Land acquisition Plots in these Regulations Homes in this submarket Construction Home building in Offtake Household landlords find
neighbourhoods are larger than in are predominantly code compliant this Submarket is often an owner- potential renters through word of
Submarket 02, a carry-over from (formal) at the outset, validated by a led exercise, with the property mouth but are largely supported
the first cadastral maps and registered engineer and submitted to owner serving as developer, by an extensive and competitive
regulations that had higher the District office for permitting. construction manager and broker network. Costs are split
minimum property sizes. Although However, with limited inspection overseer working in partnership between property owner and
there may be multiple houses on a capacity, authorities may not notice with a master mason or renter.
plot, formal subdivisions are less improvisations made by independent engineer.
frequent than in Submarket 02. entrepreneurial landlords during
Maintenance No formal
implementation. This is critical
mechanism to do regular
especially since the introduction of
Infrastructure This submarket is maintenance on properties.
zoning regulations that favour
serviced by proper water and Owner does repairs as needed.
densification challenge the preferred
electricity lines. Homes that do not housing typology for this submarket:
have internal connections at least single-family residences.
have access to piped water in the
yard.
SUBMARKET 03:
HOUSEHOLD LANDLORD FINANCIAL LINKAGES
Bungalow
Although Submarket 03’s value chain is largely code compliant, it is structured around rental agreements/income that may not always be formalized.
Land acquisition Land is typically Construction The homeowner may Offtake Brokers power the rental
acquired by homeowners via direct chose to finance the construction market for Submarket 03. Typical
purchase (using savings or family through a personal loan or cash fees for their services are 3-5% for
loans) or is inherited. savings. Since the homeowner a sale and 1 months rent in the
manages the site him/herself, case of a rental. The fees are split
building material purchases can be between the property owner and
Infrastructure Modest upgrades
done at a later date and finishings the buyer/renter. There are rarely
are made in the form of solar water
can even be postponed in the event if any marketing expenses.
heaters on some of the newer
of a cash shortage. Floor plans can
home constructions in this
also be adjusted on site to allow for Maintenance As with
submarket.
illegal multi-family units. construction, critical home
Regulations Permitting costs are upgrades are typically made with
born by the homeowner (including For plot owners who rent, financing savings or small loans from family, Typical Submarket 03 home
technician fees). However, homes upgrades/additions is far easier to friends or savings groups. construction financing scheme
are usually based off of typical budget as payments/deposits for (courtesy Rapid Urbanism)
plans and so limited intervention by materials can be made with rental
inspectors is done on site. income.
HOUSEHOLD LANDLORD
Bungalow
CHALLENGES
No real challenges: While housing is tied The Kigali Master Plan Mason or owner- Most homes are built Significant level of No formal
opportunity for to the electricity, has imposed density built homes are built with formal materials household mechanism
backyard landlordism water & sanitation requirements than without formal with mostly formal landlordism (1/3 of
with size of plots. grids, few have piped many buildings do not plans and often do utility connections. New owners) creates
water or flush toilets. follow. not respond to structures are income-earning
Density requirements Informal masons resident/tenant permitted and largely opportunities.
in the Master Plan operate in this market needs. follow city development Tenants are generally
will put further – experienced but not guidelines. Most employed but unable
pressure on registered. This limits housing is self-built to access finance for
infrastructure. their access to with savings, no ownership.
finance. Masons are finance. Scale SME support for
also not insured. efficiencies are not commissaires /
achieved. brokers to
growth their
FINANCE-RELATED
SME business support Lenders to provide Construction financing to support owner- businesses to
In-situ infrastructure
OPPORTUNITIES
to assist small Digitisation include

upgrading for water & sample plan builders finish their construction quickly.
builders formalise opportunity to property
sanitation. catalogues in support Construction financing to assist small
their operations. connect supply management &
Housing microfinance of mortgageable builders formalise and scale their
Regulatory support chain linkages maintenance.
to support installation dwellings operations.
for incrementally
of water pipes & flush
achieving density Development of a builder warranty scheme that creates a standard for
toilets.
requirements. quality design and construction, to enable finance.
HOUSEHOLD LANDLORD DIGITISATION TO SUPPORT SUPPLY-SIDE LINKAGES & A MOBILE MARKET PLACE IN KENYA, SOUTH AFRICA, NIGERIA, INDONESIA, INDIA
Key Takeaways
• iBUILD is a mobile app that aims to formalise
iBuild Global sits at the nexus of demand
and improve the delivery of small-scale
and supply and creating a market place in construction for low-income households
which buyers and sellers of building • The app acts as a mobile marketplace
materials and construction services find connecting housing sector players:
one another on a virtual platform. households to builders, contractors and
Presented as an app, the Kenyan offering lenders; builders to one another, to material
allows households or small builders who suppliers, and to lenders.
• Similar to Uber, iBUILD allows households to
wish to commission or undertake some
rate and review builders and service
form of building or home improvement
providers. This creates a track record that
work, a place to post their request for suppliers can then use to raise capital
proposals. Through the app, the request • They also aim to support the certification and
is received by service providers, who then upskilling of informal builders
compete with one another in bidding for
the work. The app aggregates a market Opportunities for Rwanda
• The creation of a digital marketplace for
for both buyer and seller, creating a
affordable housing would be relevant across
competitive environment which then
the six submarkets.
supports service providers in raising • The iBuild app also allows lenders to issue
capital to further grow their businesses. credit for housing and know it is used for that
purpose.
See www.ibuild.global
HOUSEHOLD LANDLORD FINANCING HOUSEHOLD LANDLORDS AND MICROBUILDERS IN SOUTH AFRICA
Main product features Key Takeaways

• Specialist lending reduces risk in working with these
uMaStandi www.umastandi.co.za emerging businesses, bringing costs down
• Borrowers must own the property on which they wish to • Backyard landlordism leverages existing property for
develop rental accommodation. the construction of additional housing, creating also
• uMaStandi works with the borrower to determine the an income stream for the small scale landlord
appropriate design approach, financial feasibility and • Finance approved on the basis of the financial
other factors feasibility of the rental development, and not
South Africa’s housing finance framework has historically • Loan finances a minimum of 4-12 rooms with private or existing borrower income.
targeted large-scale developers and greenfield shared toilets and showers • Disbursement in stages saves on financing costs
developments. More recently, the activities of micro • 15 year mortgage loan while managing repayment risk
builders, owner-builders and backyard landlords have
been recognised, and targeted mortgage and non- iBuild Homeloans www.ibuildhomeloans.com Opportunities for Rwanda
mortgage housing finance products have been • Borrowers must earn a minimum joint income of • To support the development of niche-market
developed to capitalise on this construction activity. R5500/month mortgage lenders that can target the particular
• Loan amounts from R60 000, with monthly instalments borrowing requirements of household landlords
uMaStandi is a mortgage lender which offers mortgage starting at R1500 per month • To include this sort of mortgage lending among the
finance, training and mentorship to qualifying • Loans paid in stages. Half of the loan is disbursed directly targets of the pending Rwanda Mortgage Refinance
entrepreneurs who wish to build income-producing to the building material supplier, while the other half is Facility
rental accommodation. Entrepreneurs are assisted in disbursed to the borrower for labour and incidentals • To work with local municipalities to create
identifying and appointing builders, submitting and • The fee for construction advice is built into the loan mechanisms that support quality building towards
getting plan approvals and ensuring the construction of facility. the development of mortgage dwellings
their rental development on time and within budget.
iBuild Homeloans offers mortgage finance to Lenders face three key challenges in their engagement with For a case study of seven micro builders in South Africa, see
homeowners to build rooms for rent in their backyard. small scale landlords: affordability, quality and security. https://housingfinanceafrica.org/documents/case-study-14-financing-micro-
developments-of-residential-rental-stock-case-studies-of-seven-small-scale-
Loans are disbursed in four construction phases: 1) These lenders are managing these risks with relationship- landlords-in-cape-town/
Foundations 2) Walls 3) Roof, 4) Fixtures and Fittings and based, market-specialist lending products that leverage
For a blog on microfinance for micro builders in South Africa, see
5) Complete. borrowers’ existing assets. https://housingfinanceafrica.org/documents/innovations-in-backyard-rental-
models-for-the-2020s/
HOUSEHOLD LANDLORD MORTGAGE FINANCING FOR HOUSEHOLD-DRIVEN INCREMENTAL HOUSING CONSTRUCTION IN ZAMBIA
Main product features Key Takeaways

Zambian Home Loans offers four mortgage products: • Zambian Home Loans capitalises on the fact that its
construction loan, equity release, land purchase and USD loan immediately lowers the loan-to-value ratio as
The low level of formal housing delivery in Zambia loans. Borrowers must own their plot of land with a title in the improvements it finances increase the value of
means that most middle-class households still build their a family member’s name. The must earn more than the property.
housing themselves, incrementally. The lack of finance ZK6600 (360,000 FRW) per month, and be able to • By disbursing the loan in tranches, ZHL is able to
has meant that many homebuilding projects get stalled demonstrate a consistent monthly income. Loans can be manage its own risk, while also reducing the
and remain incomplete when the homebuilder runs out up to 20 years at a variable rate tied to the national policy financing costs for the borrower.
of funds. Zambian Home Loans (ZHL) addresses this by rate. The land finance loan has a slightly higher interest • Specialist lending means that ZHL comes to
offering an alternative to the conventional mortgage rate than the construction or equity release mortgages. understand the home building process very well,
finance instrument: a building loan, which is converted and can assess risk with greater precision while
to a mortgage once construction of the house has been Zambian Home Loans has partnered with various building offering useful advice and construction support to
completed. material supply companies, such as Builders Warehouse, the borrower.
ZHL is specialised mortgage institution owned by African Sunshare, MicMar, NDS Glass and Aluminium, Vaal • ZHL’s interest in the quality of the structure acts as a
Life Financial Services and Sofala Capital. It specialises in Sanitaryware, Union Tiles and MAT Floors, and are able to useful mechanism to support housing quality in an
building loans which are paid out in tranches according secure bulk discounts. ZHL offers standard house plans for unregulated construction sector.
to the various building stages, i.e. foundations, walls, 1 to 4 bedroom houses. Borrowers can choose their own
roof, fixtures and fittings and the complete house. Once contractors, but ZHL does keep a list of those who have Opportunities for Rwanda
a stage has been completed, a tranche payment is made performed poorly in the past so they are not used again. • Incremental home construction by middle-class
for the next construction stage. This financing structure borrowers is a common form of housing delivery.
guarantees that the final product will be delivered as per ZHL charges a once-off fee for these services which is built This product would be usefully received in Rwanda,
the agreement and the required quality standards, into the overall loan balance. All borrowers are required to and could be an initiative that one of the RMRC-
ultimately resulting in physical collateral to put against take credit life insurance. participating banks could introduce.
the building loan.
See www.zambianhomeloans.com
1,000 0.04% 0.2% ~ RWF 188,000

Housing Block
04 EMPLOYER HOUSING I URBAN

Access to housing facilitated by the employer
Image credits @www.homeland.rw

URBAN BLUE COLLAR WORKERS MAIN SOURCE OF WATER MAIN MATERIALS OF ROOF (TOP 3)
Piped to yard/plot 38% Metal sheets/ corrugated iron 93%
262,000 HOUSEHOLDS (10% of all households)
According to EICV 5, only about 966 households (0.2%
LOCATION
of urban households) currently live in a dwelling Protected spring 11% Industrial tiles 0,4%
provider by their employer. However, given new
Urban areas
policies and national legislation in place to support the
creation of Industrial Parks, this segment is likely to
grow in the future. These industrial parks will likely
employ those in elementary occupations, craft and
Electricity from EUCL 80% Mud bricks covered with cement 59%
trade related workers and plant and machine Candle 10%
operators and assemblers. This group of workers has
Mud bricks 17%
been profiled over the next few slides Torch/Phone 5% Oven fired bricks 10%
Rented 52%
Flush toilet 13% 52% share a Beaten earth 23%
Dwelling provided free 5% toilet facility
Pit latrine without slab 3% Clay tiles 12%
Dwelling provided by employer 1%

Average HH size:
11% 22%
2-4 50%

sleeping room
URBAN BLUE COLLAR WORKERS PEOPLE
334,000 Adults 16+ AGE GROUP HIGEST LEVEL OF EDUCATION
(5% of the total adult population) (ADULTS 16+)
56+ 0.9% 3% Female
Tertiary 2%
GENDER Male
46 - 55 3% 8%
36 - 45 9% 14% Some secondary 16%
38% Male
62% Female 26 - 35 26% 40% At least some primary 68%
16 - 25 61% 35% None 7%
PERCENTAGE OF HOUSEHOLDS
TOP 5 OCCUPATIONS THAT RECEIVED AN INCOME PERCENTAGE OF HOUSEHOLDS
FROM PROPERTY RENT IN THE THAT RECEIVED A REMITTANCE
PAST 12 MONTHS IN THE PAST 12 MONTHS
Domestic cleaners and helpers 38%
Building construction labourers 8%

16% 52%
Car, taxi and van drivers 7%
Tailors, dressmakers, furriers and hatters 5%

30% of owner
Motorcycle drivers 4% households received
an income from rent
Source: EICV 5
SUBMARKET 04: EMPLOYER HOUSING TYPICAL USER PROFILES
JANVIER - SUPPLIER PROVIDENCE - BENEFICIARY JOSÉPHINE - SUPPLIER
GENDER: Male GENDER: Female GENDER: Female
AGE: 54 AGE: 34 AGE: 49
OCCUPATION: Business OCCUPATION: OCCUPATION: Head of
LOCATION: Gisozi INCOME: Furniture Cooperative
75,000 FRW /month LOCATION: Muhima
LOCATION: Nyaruguru-Nyakizu

Janvier is an entrepreneur who has successfully nurtured Providence is a married mother of 5, working and living in Josephine is married with 4 grown children. Since 2002, she has
several small businesses in his native Rwanda as well as in Nyaruguru-Nyakizu where she and her husband work on a tea managed a furniture cooperative with a small workshop and
Mozambique and South Africa. In partnership with colleagues plantation. showroom in Muhima. The other members of the cooperative
from Dubai, he plans to launch a plastics recycling business HH Monthly Income : 1,900,000 FRW are artisans from the Districts who travel to Kigali to weave
and has already negotiated with RDB to secure a plot in the furniture and make traditional Rwandan craft products. Some
Special Economic Zone (SEZ). As part of the land agreement, cooperative members sleep in the workshop while others rent
RDB and the City of Kigali have asked him to conform to the CHALLENGES rooms in one of the neighbouring unplanned settlements where
2050 Land Use Master Plan by providing housing for • Providence and her husband still have to purchase land and they may do other odd jobs for additional income. With the
employees across the valley in Ndera. build the house from scratch, which is not something they advent of the Kigali Master Plan 2050, the Cooperative must
have experience doing. move its location to a Light Industrial Zone (L1). Josephine would
CHALLENGES
like to use this opportunity to provide modest living quarters for
• Janvier’s Dubai-based partners are responsible for bringing OPPORTUNITIES members of the cooperative. Average salary of cooperative
the machinery and he will assume responsibility for building artisan: 200,000 FRW
the warehouse. He does not have the financing to service • If a development offered affordable housing solutions, CHALLENGES
and develop an additional property outside of the SEZ for 50 Providence could afford to purchase in a development
• Josephine is comfortable with building sleeping quarters at the
employees and their families, let alone rental housing that new warehouse, but does not have the capital upfront
requires close management and maintenance. especially if the workshop will need to close temporarily to
facilitate the transition.
OPPORTUNITIES
OPPORTUNITIES
• GoR is currently reviewing their Affordable Housing subsidy
policy to see if land could be added to the list. Contribution • The cooperative’s land in Muhima is centrally located and has a high
to job creation could be one of the conditions of eligibility. value. That money could easily finance acquisition of a new plot and
• Digitised payments to create a visible track record of some site preparatory works
business activity and enable access to finance • Digitised payments to create a visible track record of business
activity and enable access to finance
SUBMARKET 04:
SUBMARKET 04
HOUSEHOLD LANDLORD
EMPLOYER HOUSING EMPLOYER HOUSING
URBAN Housing Block
The Kigali City Master
Plan 2050 has allocated Submarket 04 may be the smallest of the 6 submarkets, but
15.8 km2 to industrial with new policies and national legislation in place to support
parks in 3 categories: the creation of Industrial Parks (e.g., National Land Use
light industrial, general Development Plan), there is an opportunity for exponential
and mining/quarrying. and rapid growth. Not only could Submarket 04 drastically
Together the 3 types increase the number of rental housing units on the market, it
should deliver more than could effectively formalize the demand from households
300,000 jobs by 2050. currently being serviced by Submarket 02’s informal supply
Consequently, the plan chain.
proposes an Integrated Although the employer housing options on the market are
Industrial Park Model, few, they are sprinkled across the income pyramid (foreigners
small industrial cities of are provided with housing options via their employers) with
sorts that can deliver a the majority of offerings for low-income earners.
comprehensive live/work Consequently, a review of the housing supply chain for
environment to improve Submarket 04 indicates similar trends observed in
quality of life and Submarkets 01 and 02: largely informal with gaps related to
productivity. improper access to infrastructure, improvised construction
Additional industrial and little to no maintenance.
parks are planned for the Growing Submarket 04 will require important strengthening
6 Secondary Cities. In of the value chain in the planning, design and construction
Muhanga District alone, links as well as on the maintenance. To date, property
633 km2 of industrial management companies that handle hundreds of rental units
park by 2050 are being for an often transient population (potential for high turnover
proposed (approval of among unskilled labour) are not active in the market. There
Secondary City Master exists the potential to share experiences, skills and/or market
Plans are awaiting with the IDP Model Village program or with vocational
cabinet approval) schools that provide student housing, both of which have a
strong presence in secondary cities.
Image credits @Surbana Jurong, Kigali City Master Plan 2050

SUBMARKET 04
EMPLOYER HOUSING VALUE CHAIN LINKAGES
EMPLOYER HOUSING - URBAN Housing Block
Employee housing is currently unregulated and delivered informally, with a value chain focused solely on providing basic accommodation to transient workers.
Land acquisition No land purchase Infrastructure Labour inspectors Construction Employee quarters on Offtake Given the seasonal nature
required. Employer housing for are tasked with verifying that most industrial sites are of many low-income jobs in
those at the lower end of the workplaces provide their rudimentary, built of wood, Rwanda, most employer housing is
income pyramid is mostly located employees with access to basic mudbricks, and possibly traditional delivered as-is to a rotating group
directly on the jobsite and is a infrastructure. For those living and bricks, similar to the housing of employees. In some more stable
temporary solution. For those at working on work sites, these observed in Submarkets 01 and 02. sectors, employees may benefit
the higher end, housing is typically shared facilities service them even from a more permanent shelter (to
NOTE: Specific building standards
through the form of a cash subsidy after hours. Temporary worksites be shared) belonging to the owner
or regulations for employee
for a rental property. (e.g., construction sites, etc.) are near the work site.
housing do not yet exist.
Banks like BK and BNR and/or some typically less compliant with these
cooperatives have purchased land regulations.
for employees/members to build
family housing. However, For rental employer housing at the
construction on most sites has higher end of the income pyramid,
moved forward as employees the homes are fully serviced
prefer a different location or are offerings from Submarkets 03, 05
still saving funds for construction. or 06.
SUBMARKET 04
EMPLOYER HOUSING FINANCIAL LINKAGES
EMPLOYER HOUSING - URBAN Housing Block
The value chain for Submarket 04 is unique in that it capitalizes on existing assets to deliver housing that largely excludes expenditures and financial commitments
Land acquisition Land is owned by Infrastructure For those formal Construction This is the only link in Offtake If properly planned for,
the employer or company. businesses requiring approval from the existing employer housing value providing rental or free-of-cost
Rwanda Standards Board for chain that requires a financial housing can be a lucrative
licensing, access to basic output. Construction is typically proposition for a company,
infrastructure is guaranteed. In so paid for with business owner or provided it is taken into account in
much as labour inspectors can company funds without the need the business planning and the
monitor work sites and ensure for external cash inputs (e.g., company has the capacity to
proper working conditions, personal loan) when provided at manage rotating tenants.
employer housing provides access small scale.
to basic services. For large companies/enterprises,
financing construction of a rental
housing estate is an unplanned
expense and companies typically
do not wish to become real estate
managers alongside their core
business.
EMPLOYER HOUSING
EMPLOYER HOUSING
Housing Block
CHALLENGES
Land in proximity of New industrial parks Industrial park plans A new form of Potential landlords who Very few property Very few property
the SEZs is privately will require the do not specify housing delivery, might offer employer management management
owned. Acquisition delivery of requirements for there are housing for rental do companies to manage companies to manage
of additional land infrastructure meet employers to provide opportunities to not have access to rental. rental and ensure
outside of the expected employee worker housing. This develop family and finance. Homeownership ongoing maintenance
business likely densities, in addition creates a serious risk single worker Scale delivery is options will only be
threatens business to what is already for workers, and for housing. critically needed if viable where the SEZ
plan viability being provided to the the long term potential demand of is well located.
SEZs. sustainability of the 150,00 – 300,000 units
parks. delivered by 2050.
Linking Industrial Park

Development of an Development of a Employers can assist lenders SME
worker housing Development of an
FINANCE-RELATED
Industrial Park sample plan catalogue manage repayment risk by development

development to a Industrial Park
OPPORTUNITIES
Employee Housing for Employee Housing providing payroll deductible of property

pension fund could Employer Housing REIT
policy and regulations and backyard rental loans, or daily collections for management
provide a basis for
with tax incentives for contract workers. capacity
long term
large and small scale
infrastructure
employers. Digitised payments to create a visible track record of
financing.
business activity and enable access to finance
10,500 0.4% 2% ~ RWF 905,000

Villa, Row house, Luxury villa, Apartment
05 SMALL-SCALE DEVELOPER I URBAN

50 – 100 code-compliant dwelling units 06 LARGE-SCALE DEVELOPER I URBAN
100 or more code-compliant dwelling units
Image credits @propertymagazine.rw and @Vision City Estates

SUBMARKET 05 & 06: SMALL/LARGE DEVELOPER MAIN SOURCE OF WATER MAIN MATERIALS OF ROOF (TOP 3)
10,450 HOUSEHOLDS (0.39% of all households)
Piped into dwelling 52% Metal sheets/ corrugated iron 94%
Piped to yard/plot 48% Industrial tiles 6%
LOCATION
Urban areas
This submarket
represents 2% Electricity from EUCL 100% Oven fired bricks 64%
of urban
households Candle 0% Cement bricks 36%
29% of adults
moved to the
district within Torch/Phone 0% Mud bricks covered with cement 0%
the past 5 years
Owned 62% Flush toilet 100% Clay tiles 75%

Rented 34% Median rent pm: Pit latrine with solid slab 0% 2% share a Cement 24%
RWF 275,000 toilet facility
Dwelling provided free 4% NOTE: Sample size of Pit latrine without slab 0% Beaten earth 1%
16 responses

Average HH size: 0% 3%
2-4 42%

sleeping room
SUBMARKET 05 & 06: SMALL AND LARGE-SCALE DEVELOPERS PEOPLE
64,100 PEOPLE AGE GROUP HIGEST LEVEL OF EDUCATION
(0.54% of the total population) (ADULTS 16+)
56+ 4% 2%
Female
Tertiary 32%
36 - 45 9% 13%
Some secondary 12%
Male 26 - 35 15% 17%
52% 48%
Female 16 - 25 36% 31%
< 16 28% 29% None 7%
PERCENTAGE OF
Salary/wage (private sector / non-farm) 46% PERCENTAGE OF
HOUSEHOLDS THAT
RECEIVED AN INCOME
Self-employed 12% earners are permanently
FROM PROPERTY
RECEIVED A
employed % of HHs with at least one REMITTANCE IN THE
formally employed person or RENT IN THE PAST 12
Salary/wage (public sector) 11% registered business owner* MONTHS
PAST 12 MONTHS
Unpaid worker 5% 89% of self-employed are

registered (RRA/RDB)
Salary/wage (farm) 0% business owners 97% 27% 44%
Not employed 25%

SUBMARKET 05 & 06: SMALL AND LARGE-SCALE DEVELOPERS (10,500 HOUSEHOLDS) HOUSEHOLD CAPACITY
ESTIMATED MONTHLY HOUSEHOLD INCOME* (RWF)
1M+ 47,4%
1% 1%
900,000 - 999,999 2,7%
ALL
HOUSEHOLDS
21% 8% 4% 18% 2% 14% 4% 2% 24% 800,000 - 899,999 14,8%
Median monthly
700,000 - 799,999 2,9% HH income:
1% 600,000 - 699,999 9,2%
RWF 905,000
RENTERS
(9% of 19% 23% 3% 20% 2% 6% 3% 2% 20% 500,000 - 599,999 21,7%
households)
400,000 - 499,999 1,3%
transport home repairs housing (other) [1]
200,000 - 299,999 0,0%
health other [2]
100,000 - 199,999 0,0%
50,000 - 99,999 0,0%
[2] Other: Equipment maintenance, recreation, alcohol and tobacco, miscellaneous <50,000 0,0%

Percentage of all households
who spend 45% or more of
who spend 30% or more expenditure on monthly loan repayments
their income on housing and
transport*
HOUSING AND TRANSPORT* % of HHs that could afford a RWF
12.5 million affordable mortgage loan 94%
29% (20 years, 11% interest)***
17% 19%
% of HHs that could afford a RWF
12.5 million mortgage loan from 62%
Banque Populaire
Source: EICV 5. (20 years, 18% interest)***
*Includes
**: rent,
Financial maintenance,
institutions water,
typically electricity,
require andto
applicants transport costsemployed or a
be formally
**Income business
registered has beenowner
estimated using
in order toexpenditure
be granted adata.
loan.Amounts have been
***Calculations inflated
assume thatfrom
2017 to 2021.
households will spent 30% of income on loan repayments and no deposit is paid
SUBMARKET 05 & 06: SMALL AND LARGER-SCALE DEVELOPERS TYPICAL USER PROFILES
VÉDASTE - CONSUMER THADÉE – CONSUMER / SUPPLIER CAROLE - SUPPLIER
GENDER: Male GENDER: Male GENDER: Female
AGE: 53 AGE: 28 AGE: 59
OCCUPATION: OCCUPATION: Marketing manager OCCUPATION: Manager
Professional HOUSEHOLD INCOME: RWF 1 M LOCATION: Bugesera
HOUSEHOLD INCOME: LOCATION: Nyamata
RWF 3.5 M
LOCATION: Kigali

Védaste has worked for International Organization for Thadée is a young marketing manager. He is engaged to be married Carole is a business woman, with a few different import companies
Migration (IOM) for nearly 20 years and frequently travels. and wants to buy a home for him and his fiancée. He decides to buy based in and around Kigali that she manages with her husband,
His daughter just got married and she and her husband want a home from a small developer that was started but unfinished Alphonse. Together they own many hectares of land in the Satellite
to buy a starter home, but they just can’t afford it through because the developer ran out of funds. The developer agrees to City of Bugesera. In 2006, when the pressure to develop the land or
personal loans and mortgages with bad conditions. Védaste sell it to Thadée at a reduced price. Thadée then has to finance the lose it got high, they decided to launch into the construction of small
helps them finance the home through savings. He expects rest of the construction before moving in with his new wife after mini-housing estates developed incrementally. The floor and
that they will live in the home for a few years until they the wedding. bathroom tiles are supplied by their import/export business.
graduate to something bigger. He will then use the house as a They build a few homes every year using the money from their other
rental property for foreigners or other young couples just He does this on the weekends and managed it himself using the
assets (and business profits). In some years, they build many houses,
starting out. personal loan he took out last year and by selling a small plot he
in others a little bit less depending on the capital available. They
CHALLENGES had purchased when he was a young bachelor.
prefer to avoid bank loans as they already have them for their other
businesses. They sell directly to young families who come with their
• Since he paid through savings, he bought the cheapest home He is considering buying another unfinished house from the
own financing. They will discount the homes if they buy quickly.
he could find in a planned estate, which has some developer that he could later finish and then quickly resell the
property. CHALLENGES
irregularities (strange floor plan, irregular sized doors and
cheap fixtures). He knows he will likely have to finance some Although they manage cost and do some self-supply, it isn’t as cost-
CHALLENGES
upgrades at some point, but will worry about that later. effective as it could be if they went faster. However, it allows them
• Using his retirements savings to buy a house is not ideal. to avoid the bank and get cash for homes that are sold.
No financing products for him to do this land deal that he wants
to do. OPPORTUNITIES
OPPORTUNITIES
OPPORTUNITIES
• Has a pension he could leverage using a pension-backed • While Carol is trying to avoid bank loans, accessing formal
loan if such a product was available finance could help her develop units at a faster rate
• Thadée is able to access formal finance from banks but the • Digitised payments to create a visible track record of
• Could afford a mortgage from a formal financial institution interest rates are high and diminish his margins business activity and enable access to finance
05 SMALL-SCALE DEVELOPER I URBAN
50 – 100 code-compliant dwelling units
Image credits @propertymagazine.rw (Sekimondo GateHills II Estates)

SUBMARKET 05
SMALL-SCALE DEVELOPER SMALL-SCALE DEVELOPER
URBAN
Submarket 05 is comprised of mid-range houses organized in

clusters (3 - 8 houses) or estates (20 or more houses). This is
a common model among local developers who have easy
access to land and finance. It is likely that these developments
do not include social amenities (club house, etc.) or anything
that requires additional neighborhood design or long-term
maintenance. The small-scale developer is typically in a hurry
to secure a quick and high return to begin repayment on their
construction loans. Consequently, scale and affordability
remain key challenges in Submarket 05, further exacerbated
by weak links in the value chain:
• high cost of capital and limited end-user finance (offtake)
• Building material supply shortages (construction)
• No formal homeowners associated to regulate cleanliness
in compound (maintenance)
Submarket 05 is most commonly for-sale housing. Any rental
units are likely sublets offered through an original buyer.
Although the estate concept would be eligible for a
government subsidy and offtake support, local developers
prefer to operate independently, using their personal
connections at the bank to get short-term construction loans
and do matchmaking between banks and potential buyers.
Most local developers consider this build-sell model to be
profitable but it requires financial means from other sources
Small-scale developer solutions are typically standalone or twin houses that are fully self-contained (parking on plot), to kickstart the project and cover any gaps or delays. It is high
facilitating parcellation, registration and sales. Storied solutions are becoming more common but units most often remain risk with a potential of equally high returns in under 5 yrs.
standalone structures. Developer provides basic roads/enclosures, with upgrades and improvements financed by buyer.
Image credits @Marachal Real Estate, Plut Properties and NIYIGENA, JD

SUBMARKET 05
SMALL-SCALE DEVELOPER VALUE CHAIN LINKAGES
SMALL-SCALE DEVELOPER - URBAN
Small-scale developers have a value chain that most closely resembles that of the IDP model villages, where they serve as decision makers and implementers
Land acquisition Prior ownership of Regulations Application review, Construction Small-scale Offtake Small-scale developers
large parcels of land is the inspection and approvals for housing developers do not hire contracting typically have a network with
foundation of the small-scale subdivisions are managed by the firms for building their homes. whom they can advertise their
developer business model. All that District One Stop Center. In the case Rather, they retain the services of a products, including the banks with
is required is to subdivision it into of multi-family housing blocks, master mason with whom they whom they likely have a
individual parcels by local developer must comply with the may have a longstanding longstanding business relationship.
authorities from the Land Center Condominium Law, which requires relationship. Material deliveries To accelerate offtake, they can
for titling. the creation of a management are managed by the developer and negotiate deals and give discounts
company and processing of the mason. If the developer has his to quick payers.
Infrastructure Small-scale individual and unit title deeds. own business, means and/or
developer assumes the interest, he or she could self-supply Maintenance Developments do not
responsibility for servicing the a portion of their own materials. often include shared facilities, so
Design Most small-scale developers
newly subdivided plot, bringing minimize engineer and design costs homeowners are responsible for
water and electricity connections to by relying on popular housing their own upkeep after purchase
each plot as well as filing requests typologies. For customers buying unless stated otherwise in the
with EUCL and WASAC for off-plan some developers offer contract.
installation of individual counters customization.
and meters.
SUBMARKET 05
SMALL-SCALE DEVELOPER FINANCIAL LINKAGES
SMALL-SCALE DEVELOPER - URBAN
The value chain for Submarket 05 is unique in that it capitalizes on existing assets to deliver housing that largely excludes expenditures and financial commitments
Land acquisition Although the Regulations Compliance with the Construction Small-scale Offtake No expenses are required
developer may not need to pay to Condominium Law is a costly developers report financing their to support offtake. Word of mouth
acquire the land, he/she must exercise that likely requires legal constructions through bank loans through existing networks suffice
finance the parcellation according council to manage for those (often facilitated by existing along with support from the banks
to a plan approved by the District. building multi-family units. As business accounts), the sale of offering mortgage products. The
Kigali and the Secondary Cities personal assets (other lands), the small-scale developer may also act
strive to comply with the higher sale of assets and/or profits from a as go-between between bank and
Infrastructure The upfront
density zoning regulations, this type side business. potential buyer to help accelerate
administrative costs associated
of transaction will become more the transaction.
with obtaining connection to the
frequent.
grid are one of the first and last
activities to be financed by the Maintenance No additional finance
Design With standard building required on behalf of the
developer. Small rebates are drawings carried over from project
offered for solar heating packages developer.
to project, the design fees for this
but supply is low and cashing in scale of project are minimal,
rebates take time. Buyer can related mostly to the cost of
pursue this channel him/herself if certifying drawings and applying for
interested. the construction permit.
06 LARGE-SCALE DEVELOPER I URBAN
100 or more code-compliant dwelling units
Image credits @Vision City Estates, Ultimate Developers Ltd.

SUBMARKET 06
LARGE-SCALE DEVELOPER VALUE CHAIN LINKAGES
LARGE-SCALE DEVELOPER - URBAN
The large-scale developers value chains carries heavy risks at the beginning and end of the value chain but if carried all the way through has the biggest reward
Land acquisition If not supplied by Regulations National policies for Construction If proprietary Offtake In cases where land
the government (who has large affordable housing exist but the technology is being used, developer expropriation is necessary, existing
land reserves), the large-scale implementation procedures for manages the entire construction landowners (some of whom may
developer will need to amalgamate allocating subsidies (e.g., process including the training of have no financial history) may be
land from private owners (process infrastructure, land) are still on the site supervisors and trade given right of first refusal for
can be supported by local drawing board. Policies recognize supervisors, particularly as it relates housing products they cannot
authorities and RHA). The process the need for cross-subsidization to QA&QC. necessarily afford. Mortgage
may be lengthy, which is a risk to and caps on unit size, construction products would need to be tailored
Important to ensure siteworks and
the developer if he/she has cost and sale price, but the to the means.
infrastructure installation are 100%
borrowed monies to finance this requirements may not yield a complete to avoid early
acquisition. financially viable business model. Maintenance Concept and design
mobilization of costly experts and
machinery on-site approval by local authorities and
Infrastructure Can be delivered as a RHA likely require proof of a viable
subsidy to the developer meeting Design Innovation is perceived as
an important tool in driving down maintenance plan.
policy conditions. In either case
(affordable or 100% market rate), a construction costs. Initiatives are
phasing strategy should be put in led by the developer but require
place to manage cost and scheduling. approval from RHA and RSB.
SUBMARKET 06
LARGE-SCALE DEVELOPER FINANCIAL LINKAGES
LARGE-SCALE DEVELOPER - URBAN
Subsidies are proposed to strengthen the value chain, but without clear implementation and financing guidelines, the developer maintains all of the risk
Land acquisition Even if land is Regulations The policy regulations Construction After infrastructure, Offtake There is currently no model
“given” by the government, the for affordable housing are this is likely to be the developer’s for developing (financing and
developer still bears the cost and prescriptive and their economic largest expense if not financing building) rental housing at scale
risk associated with earthworks, a viability remains untested on the land acquisition. and there are no property
particular challenge on steep market. Any large-scale developer management companies prepared
Short loan periods and high-
terrain. delivering affordable housing is a for estate management for rental
interest rates for local capital make
pioneer who shoulders a maximum properties. Insufficient loan
Infrastructure With no central construction delays extremely risky.
amount of risk. Construction loans products on the market to
sewerage system, developer shall
do not recognize this risk-taking. guarantee buyers will qualify and
shoulder the burden of putting in
be approved and no construction
extensive WWTP facilities in the Design The cost of innovation are financing to make rental housing
first phase of the project. not eligible for finance from banks. financially viable.
Possibility to sell connections to So any innovative design and
neighbouring plots but landowners technology is the responsibility of Maintenance Few maintenance
would likely require some the developer (e.g., licenses, companies specialized in estate
facilitation. If 100% subsidized by equipment, etc.). management. Developer wants to
government, scheduling must be recoup profit fast, likely to put
clarified with developer before short guarantees on houses.
implementation.
SUBMARKET 06
LARGE-SCALE DEVELOPER
SUMMARY OF CHALLENGES & OPPORTUNITIES
LARGE-SCALE DEVELOPER
Bungalow
CHALLENGES
Lack of Targets and New technologies New technologies Existing housing is

Serious challenges in Property
implementation requirements outlined that permit better require an important largely unaffordable
accessing developable management and
guidelines for in policies have not execution speed effort in marketing and to the majority of
land at sufficient size maintenance is
infrastructure subsidy been field-tested / often require dissemination in order Rwandans. Truly underdeveloped for
expose developer to developer has been materials and design to sensitize the public. affordable housing the time being.
delays which have expected to pioneer skills not the in They also require schemes (delivered at Critical since these
significant cost risk country investment in capacity scale) require proof of larger projects offer
implications building and upskilling commitment to more amenities than
to ensure proper minimize investment just housing
execution and minimize risks.
construction losses
Development of
infrastructure
Design of legal financing mechanisms
mechanism to that leverage the
FINANCE-RELATED
facilitate deals capital markets or Design and

OPPORTUNITIES
RSB/RHA/NIRDA to introduce an innovation board, Opportunities to explore the

Legislative support to introduction of a true
between existing long-term local capable of granting approvals and allocating pending Real Estate Facility
address shortcomings rent-to-own product
landowners to capital (pension finance to new technologies. Management Guidelines.
in Condominium law. attractive to developers
exchange land for funds) so that the Introduce a grant program to test out new Potential for Investment-
Builder warranty and builders
a new house cost of infrastructure materials and technologies and to purchase REITs to support long term
scheme to underwrite
within the is not locked within licensing to proprietary technologies/products management capacity.
risks.
development the cost of the house (start-up venture capital funding)
3. KEY ISSUES FOR CONSIDERATION
• Gaps in the value chain
• Affordability
• Capacity
• Economic impact
• Data
Capacity
The number of registered real estate companies in Rwanda increased by 2,500% between 2014 and 2017, a clear sign that the market is growing. Brokers
report that their business is heavily focused on rental, since the sector is still struggling to deliver well-located affordable solutions at scale.
Key value chain Key financing
Developer type Housing type Scale Relationship to / impact on affordability
challenge challenge
The informal developer is confronted with the building code and changing plot
Mudbrick cement house
Informal 3 – 5 units per Construction development requirements. The inexpensive rental housing solutions cannot be
for rental in a centrally Regulations
developer plot finance offered at the same price unless this developer receives important financial
located neighborhood
support to finance the transformation.
Stand-alone family The Household Landlord / House flipper advances all costs for renovating
Household home for rental or sale 1-2 new existing housing or building individual new homes for rental and sale. However,
Construction
landlord / house on single plots in houses every 5 Regulations changing regulations may force this supplier to update his housing model to
finance
flipper centrally-located years multi-story and/or multi-family, a more costly construction that would require
neighborhoods support from the bank.
Mini estate of single-
The micro-developer advances all costs so need a quick return and high-profit to
family standalone units
5 houses every continue to the next set of projects. Tends to sell higher priced homes to
Micro-developer (outer neighbourhoods Offtake End-user finance
2 years command a high return but will consider discounts for those who are quick to
of Kigali) or rowhouse
pay.
(central)
The small-scale developer relies on his own supply chain and connections to
30-40 houses
Small-scale Estate of single-family, design, build and sell units. The number of units is sufficiently large for
every Offtake End-user finance
developer twin or rowhouse units affordability to be profitable but lack of end-user finance prevents the developer
3 years
from delivering to the lowest end of the market.
Varied housing This developer has the best chances of delivering large quantities of affordable
500+ houses
Large-scale typologies delivered in Construction units to market. However, poor governance or delays in the acquisition and
every Infrastructure
developer phases in large housing finance servicing of land can quickly lead to developer failure and the affordable homes
3-5 years
estate with amenities cannot materialize.
Gaps in the value chain
The government of Rwanda’s IDP Model Village programme (submarket 00) exemplifies an efficient housing delivery model, with good engagement at each link of the
housing delivery value chain. Outside of this success, however, key gaps exist in different links for each of the six submarkets. Addressing these is the key to enabling
the affordable housing sector.
Units/batch/yr
X X X X
X X
X X
X X X
X X X
IPD Model
Village
complete
supply chain
Gaps in the value chain
Key challenges in each housing submarket ultimately have an impact on the availability of finance – whether for the developer, contractor, or the end-user.
Units/batch/yr
Building
Land for large-scale material
development is scarce shortages Buyers
and infrastructure favor self- struggle
subsidies are slow supply to access
mortgage
products Maintenance is
buyer’s task
Rental property
maintenance is
in its infancy
FORMAL
Homeowner Renovations
improvises are costly and
design with may not be
master mason authorized
INFORMAL
Rural and peri-urban incremental
homeowners do not have access to a
formal infrastructure grid, mostly build
with substandard materials and do
not have the income to finance design
and construction assistance
IPD Model
Village
complete
supply chain
Gaps in the value chain: potential interventions
At the same time, the targeted delivery of finance can influence the shape and character of the value chain, and improve outcomes.
Units/batch/yr
Financial
Leverage local pension access for •CRI
funds & capital markets SMEs along product
to fund land & long term the value •Demand-
infrastructure chain focused
mort-
gage Small scale developer
products capacity support with
construction finance
Proactive development of
rental property management
capacity; application of draft
Real Estate Management
Guidelines
FORMAL
Pre-approved
plans offered with Landlord-focused mortgage
landlord-targeted lender to enable
mortgage loans maintenance standards
Development of housing microfinancing
INFORMAL
system: wholesale finance with accredited
housing microlenders that also
offer/facilitate access to housing
construction technical assistance.
Partnership with building material supply
stores. Development of in situ
infrastructure SMEs
IDP Model
Village
complete
supply chain
5. WHAT CAN FINANCE DO?
Conclusions & Recommendations
What can finance do to help the housing sector realise Rwanda’s Vision 2050
intentions for affordable housing?
Finance is a key enabler in the housing ecosystem, and its application in support of affordable housing can seriously impact on the capacity of the sector to deliver.
In addition, finance can influence the quality of delivery: nudging practitioners towards good practice and value, the acceptance of green standards and the
prioritization of specific demand-side target markets and housing supply submarkets.
End user finance Careful housing finance product design on both the demand (end-user) and supply (construction) side can leverage additional capacity in terms of:
• The availability of end user
finance (mortgage and non- • Savings and income opportunities
mortgage) for housing can assist • A significant proportion of households realise additional income through remittances, whether from the city or abroad. How can this be
housing suppliers to target their leveraged to improve housing affordability?
products realistically at • The RSSB matched savings programme Ejo Heza could be replicated by employers. Integrating these programmes into mortgage product
household affordability. design could further grow affordability
• This can also help shift
expenditure patterns from • Many households have land assets – vacant plots – that they could sell to realise a deposit for home purchase, or that they could develop
consumption to productive as small scale landlords
investments
• Conditions on financing can • Digitisation
assert construction quality • Rwanda’s existing efforts at digitization stand the affordable housing sector in good stead, providing opportunities for demonstrating
standards that are affordable credit worthiness and bringing efficiencies into supply chains
• Consideration of the iBuild model which creates a virtual marketplace could address supply chain gaps while enhancing access to finance
Construction finance • Digitised income streams improve visibility of cashflows
• Digitisation formalizes and puts • Digitised payments to create a visible track record of business activity and enable access to finance
businesses into the tax net
• Construction finance can enable
growth to scale • Landlordism
• Conditions on financing can • A significant number of Rwandans rent their accommodation, providing their landlords with an important income stream that is largely
ensure green, sustainable invisible.
building and provision for long • Lenders need to build financial products that respond to this form of housing supply and SME
term maintenance • A key opportunity in this regard is the role of women – often the landlords, or the purveyors of home-based entreprises
What can finance do to help the housing sector realise Rwanda’s
Vision 2050 intentions for affordable housing?
Although each Submarket has its finance particularities, the value chain studies reveal that all chains have challenges with construction and
offtake financing
PRIMARY FINANCE LINKAGE GAPS
Rwanda’s robust land registration and
management system powers a micro-
developer-friendly ecosystem that provides
tens of thousands of informal housing units.
Formalizing these units (bringing them into
compliance with codes) requires finance to
repair broken value chain links, especially as it
relates to construction finance and end-user
finance.
As the housing sector grows, so too do the

opportunities for SME supplier businesses to
multiply. Anywhere that the $ appears in the
value is an opportunity for business
exchanges to be structured and financial
products developed.
Minimizing the gaps between the $ does not

necessarily mean a healthier value chain, but
it does reflect the presence of more financial
products on the market.
What can finance do? By submarket
06: Large-scale Critical need for construction finance that shapes activity Rwanda Mortgage Wholesale finance apex fund to provide
developer: urban towards affordability and sustainability. Refinance Company to housing-specialist capital and
broaden the mortgage construction TA to non-bank lenders &
products it finances to SACCOs offering:
target affordability • Housing microfinance
05: Small-scale • SME finance for housing-related
developer: urban Primary need for end-user finance to enhance buyer Information portal for first
affordability for this housing type. Construction finance businesses
time home-buyers with sites, • Unsecured construction finance for
would also assist these developers scale. commissionaires/brokers, household landlords
providing information on
properties, financial
04: Employee Potential for an Industrial Park REIT for employee housing?
products and other advice –
Digitised payments to
housing: urban Develop an Employee Housing Strategy including financial create a visible track record
structuring & taxation benefits tie into RMRC.
of business activity and
Explore private sector application of the IDP Programme enable access to finance
Extending the IDP programme
to be delivered by the private Sector coordination to explore
03: Household Use technology to support supply-side linkages and create sector as a hybrid, subsidy + finance intervention to overcome
landlord: urban digital marketplace. finance intervention. supply chain blockages and risks.
Construction finance to enable developer to scale.
End user finance product design: mortgage & unsecured, for

niche market groups – young professionals, households with
Digitised payments to create a visible track record of
02: Backyard business activity and enable access to finance
remittance income, households with informal incomes, backyard
landlord / unplanned and small scale landlords and micro builders.
Remittance-enabled sale of building materials /
settlement: urban maintenance solutions
Loan performance analytics to better define risk in Comprehensive
support of targeted loan and insurance products data collection and
analysis to track
01: Homeowner / SME financing for off-grid infrastructure provision affordable housing
Remittance-enabled sale of building materials / Streamline building material supply to prevent
incremental: rural & shortages and reduce construction costs – sector progress
maintenance solutions
peri-urban opportunity for digitisation
What can finance do? By value chain links
Skat-type land Regulatory framework to respond to Housing microfinance-specific wholesale financier to support the development
Household-level, in
consolidation and reality of rental market: land use, design of housing microfinance loan products, in urban & rural areas
situ infrastructure
densification. standards, consumer protection.
finance products to
address costs of SME opportunity to support Demand for rental creates an important
Vouchers to support services installation Municipal- and lender-approved, sample plan
growth of building material income stream for existing residents: develop
land titling and metering catalogue offered freely to micro-builders to
recycling cooperatives. SME-type microloan & mortgage products
requirements support affordable, quality structures.
Housing microfinance for that recognise future income streams as part
Support off-grid SME business support to assist Digitisation specific construction of affordability. Link to planned Rwanda
Explore potential for infrastructure SMEs small builders formalise their opportunity to bundles. Mortgage Refinance Company
land based financing coupled with product- operations. Regulatory support for connect supply
mechanisms Development of an Industrial Employers can assist lenders manage
specific housing incrementally achieving density chain linkages / Park Employer Housing REIT
microfinance requirements. digitised repayment risk by providing payroll deductible
payments to Matched savings programme loans, or daily collections for contract
Linking Industrial Park Development of an Industrial Park create track / Ejo Heza to increase access workers.
worker housing Employee Housing policy and record & access Development of a builder warranty scheme that creates a standard for
development to a regulations with tax incentives for to finance quality design and construction, to enable finance.
pension fund could large and small scale employers.
provide a basis for SME support for
long term Develop regulations / training for Specialist financing for small scale developers and rental developers, commissaires / brokers
infrastructure home owner associations providing assistance in the management of their businesses, the quality to growth their
financing. Finalise condominium law of their developments, and access to larger scale finance over time. businesses to include
Build maintenance into construction Building material supplier-provided HMF property management &
financing process maintenance.
ADDITIONAL DOCUMENTS
The following documents are available as separate files:
1. Scoping Rwanda’s Affordable Housing Demand & Supply: Full Report
2. Scoping Rwanda’s Affordable Housing Demand & Supply: Executive Summary
3. Affordable Housing in Rwanda: Demand-side analysis
4. Affordable Housing in Rwanda: Housing Finance Access Frontiers
5. Affordable Housing in Rwanda: Housing supply-submarkets
6. Affordable Housing in Rwanda: Sale and rent prices in Rwanda’s housing market
7. A Review of the Data Landscape in Rwanda’s Housing Ecosystem
8. Rwanda’s affordable housing sector: overview of the institutions, policies and
legislation that shape the sector

Scoping Rwandas Affordable Housing Sector and Its Financing

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Scoping Rwandas Affordable Housing Sector and Its Financing

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Scoping Rwanda’s Affordable

Housing Sector and its Financing

1. Affordable housing in Rwanda 02: Backyard Chapter contents

Source: Market studies by NIYIGENA JD 2021, DIEYE F 2013 - 2020

Source: Market studies by DIEYE and NIYIGENA

TYPE I : MEDIUM DENSITY RURAL TYPOLOGIES

FINDING 03 While the IDP programme has achieved a well-

Source*: Based on EICV 5

Kigali 78% 18% 3% 302 867

Rubavu 62% 38% 40 371

Musanze 5% 68% 25% 2% 25 342

Rusizi 71% 29% 13 697

Nyagatare 5% 83% 11% 14 437

Muhanga 5% 91% 3% 1% 12 848

Huye 7% 90% 3% 10 290

2.23 million 82% 9% ~ RWF 55,000

01 HOMEOWNER / INCREMENTAL I RURAL + PERI-URBAN

Image credits @Fatou Dieye

Torch/Phone 51% Mud bricks 40%

OCCUPANCY STATUS TOILET FACILITY MAIN MATERIALS OF FLOOR (TOP 3)

HOUSEHOLD SIZE LIVE IN OVER CROWDED MULTIPLE HOUSEHOLDS HOUSING TYPE

Source: EICV 5. Note* Over-crowding is defined as more than 3 people per

< 16 43% 47% None 20%

INCOME SOURCES (ADULTS 16+) INCOME SOURCES (HOUSEHOLDS)

Salary/wage (private sector / non-farm) 10%

Affordability calculations will assume that households

BACKGROUND BACKGROUND BACKGROUND

Submarket 01 is comprised primarily of owner-occupied

Source: General Architecture Collaborative

CURRENT PRODUCTS Key Takeaways

Source: Interview with G. Datar, CEO and co-founder of EarthEnable

ENGIE (formerly Mobisol)

ENGIE Mobisol offers state-of-the-art clean energy Opportunities

Source: Interview with S. Kayitesi, MD of Engie Mobisol Rwanda

BBOXX GENERAL ARCHITECTURE COLLABORATIVE MIT, RHA & SKAT/SDC PROECCO

The home was constructed using all local materials

Source: General Architecture Collaborative

Source: General Architecture Collaborative

The Land Use Poor access to Ad-hoc

No significant Significant need for

Loan products can be EarthEnable is a well targeted intervention

Off-grid Product-specific housing

infrastructure structured as SME loans if microfinance. Building

0.38 million 14% 72% ~ RWF 133,000

02 BACKYARD LANDLORD I URBAN

Image credits @Fatou Dieye

OCCUPANCY STATUS TOILET FACILITY MAIN MATERIALS OF FLOOR (TOP 3)

HOUSEHOLD SIZE LIVE IN OVER CROWDED MULTIPLE HOUSEHOLDS HOUSING TYPE

Source: EICV 5. Note* Over-crowding is defined as more than 3 people per

INCOME SOURCES (ADULTS 16+) INCOME SOURCES (HOUSEHOLDS)

Not employed 24% 27% of owner

Affordability calculations will assume that households

BACKGROUND BACKGROUND BACKGROUND

Source: City of Kigali and SDC PROECCO / Skat Consulting

USED BUILDING MATERIAL RESALE COOPERATIVE CLIENTS

Source: Interview with Cooperative President

RENTAL HOUSING COOPERATIVE CLIENTS

Source: Interview with Cooperative President