Less than 3% of Africans qualify for mortgage financing, which explains why across the continent you see partially built structures dotted across the landscape, waiting for the next cash injection to finish the project. There’s a fascinating test case underway on the Nairobi Securities Exchange to raise housing finance for the poor, and it involves blockchain and a company called Empowa, which has come up with a novel rent-to-own model that even street hawkers and informal sector workers can afford. Last year, Empowa struck a partnership with the exchange focused on developing a Cardano blockchain-based platform for tokenising real-world assets (RWAs), specifically to address affordable housing finance in Kenya and across Africa.
The blockchain is an immutable ledger operating in real time that tracks who’s making rental payments, who’s late with their payments and how much funds are received into the property pool. The default risks recorded by Empowa are way lower than the non-performing mortgage loans reported by the banks (averaging 3-6%). “A mortgage is fit for purpose for the formally employed,” he says.
“The risk in this environment is not from the individual payer, but it’s actually in the pipeline.” “Right from 1994, at the time of transition, I have said we need a Marshall Plan to invest into townships,” says Jordan. Empowa received some funding from Cardano that will help it scale its low-cost (and climate resilient) housing programmes in Africa, now operating in seven countries.
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