Pan Africa Building Society - Special Home Ownership Financing Scheme: Zambia
Project Start Date: March 2004
Funding: FDCF £65,000 (47%); Pan African Building Society £73,310 (53%)
What is it?
The Pan African Building Society is offering loans to people on low wages, particularly public sector employees with assured salaries (especially female teachers, nurses and police women) to buy or improve property.
Low income workers who are unable to borrow because they lack collateral or can't afford high interest payments
Women who have previously been excluded from owning property
The construction industry in poor areas
The Zambian government's Home Ownership Empowerment Policy is creating demand for housing finance which this scheme is helping to satisfy
Pan Africa building Society aims to gain 1,425 new borrowers within 3 years rising to 2,100 by the scheme's end
Applicants pay salaries into a loan qualifying account; loan repayments are automatically debited
Minimum account balance of K100,000 is much lower than the existing equivalent
Loans start at K5m (approximately £600): sufficient to self-build a two room house
Loans are subject to interest kept 2-4% below the current market rate and are repayable within 36 months
The policy is insured with Madison Insurance Company
The scheme is unique in that it offers low-salaried workers, and particularly women, the opportunity to borrow funds to buy or improve their property. This group has never previously had access to this kind of borrowing from the major banks and lending institutions of Zambia and women have been excluded from borrowing by custom.