This month, Reall instigates a two-year, FCDO-funded project to catalyse market change in sub-Saharan Africa. Supported by FCDO’s IMPACT Programme, Reall will drive innovative research, networking, and technological engagement with key influencers in Kenya and Nigeria. This could fundamentally transform housing markets for the bottom of the income pyramid, driving sustainable development and crowding in new impact investment.

Affordable, Inclusive Mortgages

Reall’s work has shown that affordable housing is an uncrowded, £14 trillion market. Despite the proven opportunity, impact investors have been deterred from investing in affordable housing by a lack of affordable mortgage finance. In Nigeria, there are only 110,000 mortgages for a country of 200 million people.

People living on low incomes in such contexts are perceived as high risk and excluded from mortgage finance by lenders. With no other option, these families have no choice but to build substandard housing, paid for with expensive informal credit. In the context of COVID-19’s profound and disproportionate economic impact in emerging markets, there is an urgent need to expand financial inclusion and access to housing assets for people in informal employment.

In Asia, Reall has made positive in roads towards addressing this challenge, partnering with an innovative Indian software developer (Syntellect) to advance cutting-edge credit assessment technology. Syntellect’s software has enabled over 14,000 informally employed and unbanked customers to be successfully assessed for mortgages. However, no equivalent technological solution exists in Africa, despite an affordable housing gap on the continent of 50 million units and a huge untapped commercial opportunity.

Demonstrating the Untapped Market Opportunity

With IMPACT Programme support, Reall will undertake research and convene new networks of stakeholders in Kenya and Nigeria to unlock affordable mortgage finance for informally employed and unbanked people. This includes the creation of a dedicated expert task force in both countries, drawing from the housing and finance ecosystem “ including impact investors, governments, commercial banks, microfinance providers, housing developers and end users.

Evidence and key recommendations will be leveraged to fill the data gap, promote innovative mortgage credit assessment methods, and advise the UK government, global donors, thought leaders and the wider impact investing sector. Reall and FCDO will catalyse new actors and investment towards people living on a low income to gain access to a safe and secure home.

This accelerates Reall’s new corporate strategy, to mobilise the private sector and improve the lives of 100 million people in urban Africa and Asia. Reall is proud to partner with the IMPACT Programme to drive the market transformation agenda in sub-Saharan Africa, uncovering new solutions to one of humanity’s greatest challenges.

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• The Investment Mobilisation for Prosperity and Catalytic Transformation (IMPACT) Programme aims to unblock the constraints that prevent impact investing from scaling in sub-Saharan Africa and South Asia. The goal is to reach currently underserved people as consumers, suppliers, distributors, or employees. The IMPACT Programme is managed by Palladium in partnership with The Good Economy, and funded by the UK’s Foreign, Commonwealth and Development Office (FCDO) . For more on the IMPACT Programme, go to: http://www.theimpactprogramme.org.uk

• Go to our interactive Data Dashboard to learn about Reall’s impact at a global, national and local level

• Read Reall’s 2020-25 Corporate Strategy