IFC and Lafarge Partner to Support Affordable Housing in Developing Nations
Over 50 percent of the world population now lives in cities. With increasing urbanization and the world population on constant rise, housing markets in developing countries are facing substantial challenges, struggling to keep up with the growing demand. In addition, housing value chains are often underdeveloped and cannot provide adequate living conditions for low-income groups.
IFC and Lafarge, a top-ranking player in the cement, aggregates and concrete industries, contributing to the construction of cities around the world, launched a new partnership this spring to develop joint programs to respond to the increasing demand for better access to housing globally. The partnership will allow IFC and Lafarge will collaborate on advisory programs to improve the availability of construction materials so as housing can be provided at a lower cost and in compliance with quality standards. The partnership also aims to improve access to credit for households to finance the necessary construction work.
“Combining forces to provide more affordable housing offers numerous opportunities for both of our organizations to support the housing agenda in these markets,” said Gérard Kuperfarb, Executive Vice President of Lafarge at the signing ceremony held at IFC headquarters in Washington, D.C. Peer Stein, Director of Access to Finance Advisory Services at IFC, noted: “IFC has pioneered housing finance for more than 20 years, supporting the expansion of housing finance markets with investments and advisory services to our partners. Our results indicate that this has increased the affordability of housing, leading to more jobs, increased welfare and better living standards”.
With operations in 62 countries and annual sales of EUR 15.2 billion (2013), Lafarge has set up the Affordable Housing Project within its Innovation Department to provide customers of microfinance institutions with improved access to construction materials as well as advice on construction techniques. Additionally, the unit is involved in the development of construction materials using a combination of earth, sand and cement as well as slum rehabilitation projects.
IFC’s Housing Finance program supports lenders to develop programs that combine small housing loans with the provision of construction materials and engineering advice. These loans for housing upgrades are considered key ingredients for improving housing conditions and tools for financial market development. IFC has implemented these programs in several countries including Haiti, Albania, Afghanistan, Indonesia and Bangladesh. To date, IFC has invested more than $3 billion in housing finance in over 46 countries world-wide with a focus on regions where large portions of the local population live in sub-standard housing and have limited or no access to credit to build, expand, or renovate their homes. In Afghanistan, for example, IFC worked with its client, First Microfinance Bank, to design and roll out housing microfinance loan products along with advice on construction materials and techniques to customers. Starting in 2008, the financial institution has made small housing loans to more than 19,000 people.