Co-operative, non-profit and self-help housing in Africa

UNITED NATIONS

ECONOMIC AND SOCIAL COUNCIL

C+r . ECONOMIC COMMISSION FOR AFRICA

Distr;*

L.MITSD .

E/CN.14/HOU/I05 25 June 1973

Original: ENGLISH

CO-OPERATIVE, NON-PROFIT AND SELF-HELP HOUSING IN AFRICA

TABLE OF CONTENTS

Paragraphs

Introduction ---_--___-_'___ 1-6

Role of non-profit housing associations

within national housing policies _--_---____ 7-14

Finance ---•---_ ___. 15-29

Self-help housing ---__________ 30-55

/ Egypt 31-^.0

Morocoo ---__________________ 41-48

Zambia ---__--- — ________ 49-55

Institutions for financing co-roperative and

non-profit housing --_-____________.___ 56-IOO

Organization of integrated non-profit housing systems

through national co-operative, unions, federations, etc. - 101-108 Methods of providing continued assistance (teohnical,

administrative and legal) to systems of non-profit

housing organizations ---____-______ 109-113 Proposals for a syllabus for Co-operative Housing Education H4-II8 A note on UN activities in co-operative and non-profit ■

housing in Africa --'- _______ 119-121

Organizational Chart for National Apex Co-operative Structures

E/CH.14/HOU/1O5

Introduction

1. Until the early 1950s national co-operative organizations in Africa had ■ concentrated only on agricultural producers'and consumer co-nperatives which ,were oriented towards producing agricultural goo.ds both for local consumption

and for export. ■ " '

' . . . *> ■ "*''"*' ...

2.- - During the early 1950s, however, there was; an increasing awareness of the^need for co-operatives of other types to satisfy other pressing needs such as the need for capital, the.need for hosing and the need for- machinery'^

forvthe pmductmn of consumer durables like, cooking stoves, farm -topis »-,"■■■

etc.: National co-operative organizations were sometimes overwhelmed by-the "■

demand for-other types of coops, others have been able to meet the demand by employing specialists who .are able to cope with diversity of services

demanded. The narrow approach whereby co-operatives concentrated-only on the

IZiT, T-and+ma+kQtin? °f aSricult^al ffonds is rapidly breaking, down. The

public administrations have been largely responsible for the change of attitude to. co-operative organization. " • '

3. Co-operative organization and methods are not new to the African • ' ■ environment. Tfcere have been traditional savings and loans. associations- ■■ i =

which.provided liquidity for the community; . co-operatives which provided- -:."

^T°^ratlve^hnvever, were basically.oriented Ward« local, communities- ,-.

With thf T / sported nor exported goods and. services from the, community -

«£■ ?P ft ec^^s, and the appreciation of ,the".need .for goods ,and

services which have not been locally available, modern co-

tvZ Tnl TCTtf:h c^lex tha" ^ tralition:

ll*t £ f their Size they have had tn have legal standing which

made them responsible to the processes of law. Jn thls way, the mS multi-purpose producer/consumer co-operatives were bom.. .,■-•■

;

as^responsibility for housing. One o

—

E/CNcl4/H0U/lO5

Page 2

Role of non-profit housing associations within national housing policies

7- Most countries of the region do realize, as a matter of policy that a least cpst approach to provide housing to low-income groups is through co operatives and aided self-help organizations op through the establishment of

housing/construction agencies which acquire land, build housing and dispose of housing at cost to occupiers/buyers.

8. Not all countries have a written policy of co-operative or aided self- , - help housing but most,countries do accept non-profit housing implicitly in

their housing policies. The significant proportion of the housing demand is

expected in national policies to be provided through aided uelf-help methods,. /'

- H,

9. The following countries have indicated in their current development plans , f

that a significant proportion of the housing demand,shall be met through co- . •'

operative housing organizations: ■ ' .

. Botswana Egypt . Mauritius Mali Sudan . ,

Cameroon ' Kenya Mauritania Niger • Tunisia ■

■ ' Chad ' Ghana Morocco Nigeria (Western) Tanzania .

CAR ■ Mali ' Niger Rwanda ' Upper Volta .

Each of these States has at least one housing/construction co-operative but.

the organization and functioning of these co-operatives do not reflect their--

assigned significant r^le^in national housing programmes. , The co-operatives

need a lot of growth before they could contribute a significant proportion of.

the new housing stock. Because most co-operatives are relatively y^ungj their'operations have not been documented in detail. Egypt and Tunisia do, however, have a well recorded history-of co-operative housing activities.. ■

10. The other non-profit approach, the use of which is more widespread is of self—help, and mutual aid. In order to organize aided self—help most - governments rely heavily on their Social Welfare and Community Development' ' Agencies. These are also known as Directions de animation urbain/rural in the French-speaking countries. These agencies do organize teaching sessions which are designed to impart the basic principles of self-help techniques as well as of construction techniques so that, given an adequate supply of building materials and.land, the future home owners would be able to' set out on their own to build-their own houses. In this way managerial costs which, would normally be provided by the State are at a minimum.

11. Traditionally zoning of settlements had been done by consensus in consultation with traditional leaders. This in itself is an example of

co-operative affort; _, the various zoning functions- markets, meeting places, ' waste disposal areas, public toilets, etc; were all located taking into account the direction of wind, etc. The waste disposal functions-were generally

separated from the" living/meeting areas by tracts of green areas. In the traditional/rural, settlement members of the community were able to afford both

the time and the resources for such- planning} within the modern setting,

however, and under the economic pressures where the urban settler had room

Page 3

only at the urban fringes, he could neither afford the time nor the resources for planning. No planning whatsoever having been done and because of

pressures created by rural exodus as well'as the basic inadequacy of public services, the urban fringes are characterized by slums and shanties.

12. Co-operative societies and self-help groups whether in the urban op ,, . I rural areas do not do any urban or regional planning because they do not have

"the necessary staff. However, the departments' responsible for physical

;.- and regional planning have a lot of room for popular participation in that draft plans are submitted to all groups within the community for comments

before finalizing. ' ,

13« Non-profit housing has been planned in every African country to meet

* . the needs of the very low-income groups. The organization to supply this

need has taken the fallowing forms:

i. Co-operative housing organizations or aided self-help groups;

ii. Housing corporations; ■

iii. Savings and loan associations.

In spite of this noble objective, it has not been possible to provide the houses for. low-income groups.. There are many socio-economic reasons'for

the failure to meet the needs of-this group. It may be enough to note that there is a serious need for all these co-operative/non-profit housing

agencies to.re-address themselves to the target groups for which they were intended and to organize means by which financing, building standards and specifications.as well, as building materials could be brought within the financial capacities of. the'tafget groups.

14. ' The most serious bottleneck to the production of housing for the low-

■ ,income groups is the availability of finance, not only for the acquisition of land but also for the provision of building, materials, site planning and construction expertise, as well as for expertise in estate management. For co-operative and aided self-help "housing these services must be provided strictly at cost. The targe.t population can hardly meet these costs while the group for whom the housing is'provided is small. A constant feature

of African non-profit/co-operative housing agencies has been the regular

subsidies granted by governments to. support the overheads required for these expert services. Such subsidies have been required because the sizes, in terms of the number of dwellings put up annually, are too small to cover the overhead costs in such away as to remain within the financial capacities of the target groups. The failures of co-operative/self-help groups may be

attributed to two causes: ■ ■

i. inadequate central as weli as internal management;

ii. poor planning for setting up the appropriate standards

- and specifications. , .'

Moreover there is a certain naivety concerning non-profit organizations which tends to equate non-profit with literally free abd efficiently supplied housing.

- This is the other bottleneck and being psychological, it may be more difficult

» to overcome.

E/CN.:14/HOU/1O5

Page 4

Finance ' _ '-.

15,' Finance for nonprofit housing has taken the following forms:

i. Interest free loans to housing agencies and local

authorities f^r low-cost construction; ' . . ■ - ■ ii. Low interest long-term mortgages frtr housing • ■ '

construction; '"■"'. ■ '

; iii. Low-c^st rental units;

iv. • Savings and loan associations under auspices of housing,

1 ■ societies; 7 "i ■■ ■..'.', l

v. Interest-free supply of. building .materials by housing corporations for self-help construction. ■ .

16. None of the methods enumerated above have proved entirely successful.

They have been abused in many areas. .These abuses however have not been due to intrinsic deficiencies of the systems thecselves but to an inadequate management of those systems. In some cases finance has been provided through

the use of foreign loans. These loans are often guaranteed'by government and c^uld not be strictly described as non-profit but in as much as these loans do not accrue profit to the local borrowing agency they could be described as non-profit financing; In as much as foreign loans f«r housing do not - satisfy the basic need of the target population they may be described as ■ unsuitable for non-profit housing in .terras <^f costs and standards.

17. The housing agencies responsible for low-cos't/non-profit housing in-

Africa are generally under-staffed;because of this it has been difficult for

them t^ manage the few existing housing estates (rental units) for which

they are directly responsible. In certain cases .the co-operative ^rganiza- . tionswhich built the houses have attempted to manage the estate after they. ' have been handed over or let. The management of such estatesha-ve at best been inadequate; the co-operative organizations having been simply unable to exert the necessary authority deriving from string financial control or expert'knowledge *° enable them to manage properly.

18. • In an attempt to classify housing agencies in Africa as non-profit it is essential to note that reference t° the non-profit making role is. made only- with respect to the agency. In «ther words all costs borne by the agency whether it is a housing'corporation, housing socieiy or a housing bank or co-operative,

housing association are passed on to the consumer without profits to the

organization.' The benefits of any incidental profits should also.be shared among users of the organization. The non-profit housing organizations in Africa take, the following forms: . ...

Page 5

;i.. -.State r:housihg corporations or boards;...1. ' ■ .;

ii. Building societies'1; ' ,' ■""" " "'. , . .' • iii. Socie".tes immobiliers; '-'•■.

iy. Housing banks/Estate-banks. ' .'.' , - -.

19. - Housing corporations?-have been set up primai-ily'ih the English- . = speaking countries'-of Africa. Their functions' are "similar to "those of^the . ' -■-.

socie'tes immobiliersr and their main purpose is to provide housing at cost •■

to the users/occupiers., ■ * • : ' .

2^. In the English-speaking countries of East".arid" Central Africa the-'-. - equivalent.-of the work done by housing corporations is done by housing

boards .which provide the finance to"either individuals or local "councils-for ■■

building. ..They add a service charge of 1/4 per. -cent to all loans they make, ■ ■•

the housing boards themselves could charge a little extra for their services but there is no legal stipulation as fo h-w the moneys" loaned by the housing -.

boards could be dealt with. In many cases housing boards provide a lot of ' ■ technical assistance either to the local authorities or to the individual

builders. themselves. The Zambia Housing- Board in particular has. gone as far. ' -

as..:cariying out-research on l«eal materials and providing 'a booklet of

design.,from which builders can choose when they receive their loans.' . ' ' .,.-

21. jje Housing Corporations found principally, in Tanzania,' Ghana and ' "' X' Nigeria have been set up .to build houses either for sale or for rent. <mese """

Corporations hand over-the hoUSes a't cost and so in that sense they could . - be deacribed as.non-profit housing organizations. Most of the houses are -

built by the.Corporations themselves and since they are not profit oriented- "" - one could say that their costs which are passed on the buyer or the lessee '

.-much lower than would have been the case otherwise, 7.g, private homing ..-, H'. . t%^^Interesting, to draw attention t" similar organizations in North' Afrxca In Tunxsia.the Societe nationale UrblH,, HJ.:*,n^H. is a public construction agenOy which is subject to- the technical supervision of Ts

"ln"^^.w^s^d fusing and the Ministry of Pinanoe?. it has povers such lZB n ^ S"U:°ee bUt the- «"re™e»* subvents any interest due on

such l^ans. It is so active that since its inception in 1957, it is has donated the housing market in ^nisia almost completely. ...

23. -■• SNIT: is also responsible, for constructing-iouses "for the'workers " ''

wo^r^68--' ^ WA*erS °—P—Wves have been established Ty law for "

workers whose, incomes range between 1T .and 2,oro VS$ a year. The col

operatives are financed by., governor loan* (up to' 30 ye^t 2 per cent)

and the government exempts the co-operatives from all duefand taxes '

' ' E/CN.I4/HOU/I05

Page 6

=■£5

mere fre two

, are

the permanent

e certain income could

K

assistance to housing co-operatives,

; ^ne is a ' ' and winds ud

.*i

°°-°perative

in

th?nSe"se that *<V. citizen having

considerable e.perience

through the •

"of the Tanzania Second-Five^ar "

establish itself, with heavy subaidilt

National Housing C«rp»r»?Un but it f, to!

ness of Mwenge fB. sZXl^l housing ^^e^/l/ *"

I7~Sie" Ed document' entitled "Co-operative Housing Pilot ProiPrt

Dar-es-Salaam (Tanzania)" (E/CH.I4/HOD/96) Project .

Page 7

28. The Tema Society is.less than.15 months old and it has an estate of only 26 houses but is moving along on co-operative principles and it is hoped.that it would became a.viable co-operative housing society within a short time.

29. There are many small co-operative housing groups in Nigeria. These are all of the terminating type whereby members contribute in term to build each others housing. The/group is disbanded on.completion °f.the last house and the members revert to individual ownership.

Self-help housing . . ■ ■.. . , . ; ■ ■ .

30. ..In the field ...of .non-profit housjing-ini Africa, self-help groups have ■ played a greater role in providing [housing than: formally organized 00- , operative hnu&ing societies. Most of .these self-help organizations..have been, established in conjunction1 wi:th- sit.e-and-service-schemes« Self-help building organizations exist in the' following, countries with varying degrees of ."'■".■ ""■' Government sponsorship and., support: ■ . ■ ■■■..._ ...■■■.

Egypt ■ Cameroon Ethiopia

Ghana Kenya Morocco

. Nigeria" -..

Senegal Tanzania

:- Zaire and.

Zambia.

In some cases the self-help organization has been set up as a terminating society. In others,:,, for example- in Morocco, Tanzania, Egypt and Ghana.1 the \ self-help organization was set up on the basis of the granting of a core house:.to:the prospective owner who had a supply; of materials on loan to

'complete the-house., The self-help organizations in Egypt,. Zambia and Morocco

will be used as illustrative examples.. Self-help programmes, in Africa are ■

mainly applicable to rural and peri-urban groups, though they are also suitable for urban areas been mainly applied.

31. ;;-In Egypt, any member of a village- was ^qualified for.loans under the self-help housing schemes. These l;oans are. administered by the Ministry of Housing and Public Utilities which obtains funds from the bank and provides

6^ per cerit;"of'the estimated cost of the" house. The occupier is expected

to pro-vi&e the rest. * " . ' - : ■ ' ""

32. The interesting case of the Co-operative Village Reconstruction Programme-developed from the' experiences" of a pilot project at Nazlet El

Ashter Village will now be' described in detail, "as it gives a very good example of a co-operative-cum-aided-self-help housing system, and the way

it is. organized. _ ! "

33- The expanded village reconstruction programme -.(Arab Republic of Egypt)

- The organisation.of .the programme was carried out by four parties:

E/CN-14/HOU/1O5'

Page 8

i. A National Advisory Body (related to the Ministry of ," . :

Housing and Public Utilities) ; . . ..

ii. Local sponsoring agencies (Housing Departments in .the

■ ' Governorates);

iii. Intermediary "bodies (Village Co-operative' Societies);

iv. Groups of eelf-help participant families. - ■ ' 34. The.Ministry of Housing and Public Utilities had been acting as

sponsoring agency in Wazlet El Ashter, to implement the first pilot.project. ..

.of the kind carried.out in the "country; future projects were spofcsored by the Housing Departments in the Governoretes, with the' assistance of the

Ministry ,■. acting as a National Advisory Body. In the pilot project, therole of intermediary body (the local executive agency) was assigned to the ':-

agricultural do-operative society °f the village; future projects might involve the same type of"co-operative, already existing everywhere, or ■•

purposely created co-operative societies for village reconstruction. In regard to the groups of self-help participant families, they may follow a pattern similar to that of Nazlet.El Ashter, but with a greater number of

families per group, ■ . '

i . ' - .

'National Advis-Tj1, Body

35- 'The. role and :fw.:r,icns of this'body are as follnwsi

ia to introduce, in all agricultural governorates °f "the country, '"■'■■"■ ■ -\- self-help housing pilot, projects, sponsored by the local

■ ■ authorities and carried out by the village people enrolled in

co-operative societies; .

ii. to assist the local authorities in the planning and carrying

out of the pilot projects; , . ■ ■■

iii. to trar.n, in regular courses, local personnel and individuals

*■ ' concerned with the projects, at the following levels:

- managing.staff of housing departments in the governorates

(engineers, architects, planners, administrators, etc«); '* ■■

- field personnel in-charge. of social and construction.work

(foremen, social workers, assistants, etc.);

- village leaders and prominent neighbours, and adminis trators of co-operative bodies and village oouncils. . ■ iv. to prepare and provide selected audio-visual aids, to help in the.

introduction and extension of the self-help housing programme

;ar.d related task; .' .

v. ■ to be a national documentation centre, collecting world-wide experience in the field of lnw-cost housing; registering and

publication of national experience; distribution of b^°ks,

manuals and other reading material to the parties concerned;

yl. to .undertake studies and researches on the r.., . subjects: .. . . ■ .. ...

- building materials, standardization, modular co-ordination;

- prefabricati^n and other construction techniques;

-'■■ developmentTof; building -equipment for village use;

- creation of"a national revolving fund, dedicated to the financing of the village reconstruction;

- co-ordination nf-the village reconstruction programme with the agrarian and industrial development, within the lines of the regional and the national planning;

vii. to sponsor, as initial demonstrations, different pilot projects,

such as: . ■

- development of a co-operative society for village reconstruction;

-— development .of savings associations related to the ., . ■ ■;

co-operatives; ... , ' . ;.< .. ...

- development of small centres serving several villages, \ for the production nf basic building materials prefabri-.' :- ■.

cated roofs, and carpentry. . , . . . ■ .:....

agencies .... ..<■_.

The functions'of the local sponsoring agencies: . . :

(a) The execution of the physical development of the villages,

with the promotion of self-help operations and popular savings;

(b) The sponsoring of projects in various villages nf the"

Governorate t" demonstrate self-help construction; to"

set up co-operative societies dedicated to rural housing

and village facilities (water supply, sewerage, public lighting,

and electricity); « ■•■,■ .:....'. :

(o) Preparation of the necessary social studies, physical planning, housing design, and methods of construction, required for the

• carrying out of the- projects;

i

(d) The acquisition of suitable land for the housing extensions,

■ including its- division and development;

(e) The appointment of well trained personnel, to plan and execute

the projects; •

(f) Organization and running of construction workshops, with the'

provision of tools and equipments to be let to the participant

families; the running of centres, for the production of

building materials; '

E/CN.U/HOU/105 Page 10 ' -■

(g) The planning and execution of programmes of institutional co-ordination,

within the Governorate and assisting the rural housing programme as

follows: - - '

- to supply means of transportation for the movement of building materials■to the construction sites;

- to use, for rural housing, the equipment existing in the --* construction and mechanical departments of each Governorate;

- to order the production of building materials,- carpentry, etc.

in factories or workshops related to the Governorate.

(h) The organization of popular participation through the: Village Councils

in the self-help housing programme.

37» It is conceivable that some village councils had to undertake the task of sponsoring the projects, when the programme reached the stage of massive implementa tion. For those village councils, the pilot projects gave them the chance to get.

acquainted with modern concepts of village planning, site and house design, new construction techniques, and advanced management of co-operative bodies.

Intermediary bodies •'•'■•

38, The role and functions of the intermediary bodies may be described in this

way': ; /

(a) . To act as village popular bodies, in the form of co-operative ■

societies, to promote the physical development of the villages, in order to incorporate in them all the modern facilities and

standards of construction prevailing in urban areas of the country;

(b) To give membership, under the legal personality of the co-operatives,

to all village families willing to build new dwellings, repair the existing ones, and contribute efforts to the task of reconstruction;

. (c) To make request to the local authorities concerned for necessary

assistance to undeitake projects included in the rural reconstruction

programme;

(d) To make effective -the co-operative ownership of the'houses built through self-help schemes, thus creating a collective responsibility for repayment of the financial obligations contracted at the time of

construction; U '

(e) To offer savings plans to families interested in self-help projects;

(f) To undertake the co-operative'purchasing and.selling of building

materials and construction sites to be utilized in self-help projects, and by individuals willing to build on their own account.

TJAS in the Ghana Roof Loan Schemes (doc." No. E/CN.14/HOU/32).

Page 11

Groups of self-help participant families

39, Participant families are expected to share in the programme according to. the

following main points: ■. . .

(a) To provide initiative, manpower, and financial-means for the

construction of rural dwellings and communal' facilities; .

(b) To formalize their association to efforts under the personality .

of the village intermediary bodies;.

(c) .To undertake the construction of dwellings and other works under

. . .... the', supervision of the. personnel designed by the sponsoring agency;

to share in the administration of the projects by having representatives

■in the projects' committees;

(d) To refund, through the intermediary bodies, the costs of building

. materials, equipments, and services related to the proje.cts

undertaken; . . ■ '

(e) To maintain the dwellings in good condition according .to the

regulations of the ownership agreements.

A further development: The National Institute for Rural Reconstruction

4<">. The above brief review of the roles and functions of the parties involved in the expanded programme shows by itself a great variety of new activities to be undertaken for the accomplishment of the next stage of the National Plan of Rural Reconstruction. .For that, the National Advisory Body has been conceived as a necessary expansion of the present Department for Rur^i Self-Help Housing*

Morocco

41. ' In Morocco the organization of national resources for the production of low-cost housing is the responsibility of the Ministry of Works and Housing,

Housing and Urban Development Division. " . :

System Castor

42. There is a small housing co-operative movement which also deals with low-cost housing but its impact is ao small that in practical terms the non-profit housing movement is restricted to site-and-service and self- help organizations- The self-help housing movement in- Morocco is called the castor system. In this system the government provides a plot with

foundations, water and electricity. Sometimes it also provides doors and windows as well as concrete blocks. The: family provides the rest and the houses are constructed by self-help.- The ■ loan for materials and

construction, if this is done by hired labour is repaid in ten years in 120 monthly instalments,

E/CN.14/HOU/1Q5 ■

Page 12 '• ', ■ . ' .

Lot Evolutifs ■ ■''■■.. ,■'■..-■'

43, In order to enable very low income families to buy homes, the government puts serviced plots at their disposal and rent these plots to them for a period of 40 years. The lessees could construct their homes on these, plots with financial and technical aid from the State. The name of the system is derived from the

fact that these homes are constructed-in stages as. and when time and money are available. The rent paid for.the plot is two per cent of the cost of land and development. The value of this rent is revised every five years to

conform with rising costs. To qualify for .a government loan the lessee

is required to invest, at least 5°°, Dh._ approximately I1"1*"1 US$'. A loan of

I700 Dh. is usually granted. This consists of 20ODh. which are service charges and fees directly'refunded to the loan organization and 1,500 Dh, which is for construction. The, money for construction is usually paid in

stages''according to "the certified amount.of work done. .'The average payment

per stage of construction is 50pDh. ' ,

44« When the lease expires the government could do either of the following:

(a) Take possession of the land after paying the assessed value of all

/ the approved construction on the land. In. order to provent the basis of assessment of .the amount of money to be paid to the lessee

whose lease ha's expired is, strictly according to authorized

construction only; -^

(b) Take completet possession of, the plot and building only, and propose a

new site rented r-n similar basis to the former lessee. , If the lessee

■ refuses the terms the government acquires the plot and building without .

'any indemnity. . ''.">* . .:

45* T-ot" eoo'nomioue - The lot economique is designed to people of higher income xnan xne >nes just referred to" ab-^ye. 1fce candidates must have a regular income of around 25ODh. a month and must also have a saving of at least a l,<"00 Dh as contribution to the project. Out of these 1,^00 Dh.

500 Dh. is taken immediately for title registration and other fees in regard to land. The remaining 5ro Dh. is regarded as the first instalment- on the construction. The State would then loan 2,5°ODh. which is delivered; ., in instalments of .500 Eh, based f^n the assessed progress of construction.

The'construction loan plus the selling price of the serviced plot constitutes the total building loan which must also.be. paid in ten years in 120.equal

instalments. * ■ ' -

46. In addition to the three main non-profit housing systems described

above there is considerable aid for housing iconstruction which takes the ■ T

following, forms:;, ■, ... .... . - -

(a) Loans given by the State to enable people to repay, on a hire ■ --. 1; ~: .

purchase basis,' for houses constructed by the Sta-te. These State •„

loans■apparently are provided to pay for the houses in the' first

instance and then the lessee repays.on a hire-purchase basis at a . very low rate of interest. . . '■_ .- . - ■ .

Page 13

Loans granted by private organizations or banks. There are two main bodies which grant such loans:

(i) The regional savings and loan organization (CREC)

■ which lends to a maximum of Dh.20,P<X> and the

(ii) Caisse des prets imm^bilier du Maroc (CPIM)

which gives much higher .loans. The CPIM loans are ' meant for those within the middle-'-income bracket. .

47. The CHEG loans are designed for low-income people with suitable steady incomes. To stem the worsening of existing slums such loans are not given for construction in very high density areas. The CREG also gives loans between Dh.2pOO to Dh. 6,000 to: .

- (i) those who have already acquired serviced plots for construction}

and

(ii) those who wish to acquire new buildings put up by private housing .organizations.

The maximum period of repayment such loans is ten years.and the service charge on the loan given by the government is five per cent. In either ease the title trt" the land and building is held as security until the loan

is fully repaid. ' ' - - " ■

46. CPIM started after W-npld Wai^Ias an organization to help reconstruction.

It was authorized t° give loans up to 9^ per cent of estimated costs of construction. The fallowing groups qualify-for the loans:

(i) heads of large families ' '. ■ (ii) public servants of a specified seniority

■■■■-•■■ ^

(iii)' co-operative housing associations.

CPIM'contributes effectively to reducing construction costs by the following

arrangements; . ...

(i) Veterans have a rebate of 2 per 'cent.'per annum

on loans; . ' .

('11) Heads of families.with 3 children a rebate of 2

per cent plus a further rebate of 1 per cent for each additional child, however* the rate of interest payable should never fall below 3 per cent.

Page 14

Zambia . '

49» Self-help housing organization in Zambia dates from immediate post- independence period of the mid sixties when the need for social integration of housing, was most strongly felt. At this time !built-in slums' constituted

more than half of the urban centres and the slum populations were growing at about 20 per cent per annum while the urban areas were absorbing rural emigrants at the rate of 12 per. cent a year. It was clear that the housing

problems of t.uch dimensions could only be solved, by such'low-cost techniques as "site-ahd-service" and- co-operative housing associations or.self-help

housing organizations. ... .:..•■■

'5^* Given the local conditions of manpower shortage, the need'for ■ training ' leaders in the housing co-operative movement," and other social contraints,

the choice was made that the technique applicable -fco the times was Site-and-

Service/Self-Help Housing. ■ . j . ■

51. Under the site and service/self-help housing schemes, the Ministry of ■ Local Government co-ordinated all the programmes which were-executed by" ■

the local authorities and Municipal Councils.- Financial and technical

assistance was given where.necessary by the .Ministry which laid down the ' -*

guidelines for the programmes. , ,'

52... As mentioned earlier the self-help housing schemes are run by the • %-

local authorities. They work very closely with the social welfare and

community development agencies. The Central Government, through its - nominated agency, the Ministry of Local Government and Housing, or the - Housing Board provides the money .for the loans,' house plans and other ideas necessary for the success .of the project. The local governments provide the land, technical advice and supervision as well as the rest of the money. The houses are then built ora their prepared sites by the people themselves using materials bought with loans from the local

authoritiec and/of the Central Government.

53» ■ The applicant for a loan in a site-and-service-scheme must be resident in the" municipal council area where the .site is located. -He ■ must be in employment and earning at least 25K a month. He must pay a ' '

deposit of 20K or more to the local authority before, the plot is allocated.

The-money is refunded to the applicant in the form of building materials.

In addition, there are'other clauses more or less of a social nature 2j which are enforced by the supervisory team during, construction of the

house. . ■ '. ' .

1/ These include: the payment of rent within 14 days of becoming' due,

the exclusive use of dwelling by owner and members of his family only, transfers to other owners must be done with the consult of the local authorities, buildings to be kept in repair to the satisfaction of the

local authority. ■ • '

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Page 15

54- The .construction process is, supervised by a technical assistance team assembled by the local authorities.- The team* consists of:

; :(.i). a building foreman and his assistant who advise • - - . ,..

-. ■ ' the. participants on the choice purchasing and t:. ■ .. .'- use of materials. This.team also teaches the

participants basic building skills when necessary. .. ; ■ and they inspect the construction for quality;

(ii) ; a. housing officer, who is responsible, for .the . .. .■■ :

.. ..administration of. the. team; : . ,■-...

(iii); -a community development officer,and his staff, who [ •■■.

■ ! take care of the social, organization of the groups - . .- -. and advice participants on individual -problems connected,

with the scheme; . .

(iv).. "Ehere are police officers -in the technical-assistance -■

team who .ensure that the site is secure and that-there ... 'is no. burglary. The initial construction which is self-,

help, is done as a core unit. This core unit-should not coat mor:e than, ten times the amount of deposit. Thus for. a 20K deposit ^he maximum cost, of the c'ore house

would be about 200K. . . ....

Participants have a period of four years to repay the loan"with an interest '

of 5 per cent per annum." In addition, partibipa'nts pay development and "

service cherges at the rate of 3K a'monttv The'average monthly repayment :"

of-lnah-and other charges is thus about'8k.

55- In -the industrialized-mining areas most participants are able to

afford these rates" rather easily. In the rural agricultural areas, however,

this may not-be th'e case and farm'workers may find it difficult to join the

scheme.. The site-and-service-scheme in Zambia has proved very successful in the.urban^areas-of the Copperbelt and in Lusaka." ■ %

Institutions for financing Co-operative and non-profit housing

56. The money' available for1 financing' of housing may constitute'a subsidy,"

a loan or an. advance". to'-the final beneficiary. ■ The funds allocated to this activity, may.'be "considered as either capital .confirmation or simply money

to facilitate building -actriity; it may affect" housing and urban development or only just house-building.' The' funds may be channelled through public bodies such as building co-operations engaged in.building individual houses or housing estates or through banks and co-operative housing societies which will redistribute the sums available to those using the funds directly these executive units may again be other State agencies, municipalities or

individuals.

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Page 16 r .

57. In this paper a certain,amount of repetition on the modes of financing - is unavoidable since the bodies meAiioned earlier, namely . "tate, Building Societies, Co-operatives, etc. are simply 'the organized means of channelling finance, into housing and urban development. The fallowing bodies which play a significant role in providing funds for. housing and urban.development will be examined in turn; the State, the Housing Boards, -the Housing. Corporation and

finally the private sector. ... ■ ■ •' -'

58. as indicated earlier a sharp distinction will not be made between non

profit housing funds'-as such and the others. This is because in most ■

of. countries the non-profit aspect is emphasized by the executing agency and

"not by the source of finance. Normally the service charges associated with the provision of loan funds are1 passed on direct to buyers of. the. dwellings without any profits. The outline,below will, therefore, serve., to indicate how the existing financial mechanisms may be used.to advantage for non-profit

and co-operative housing.

59. The State. -. State .intervention is very significant in roos.t African countries where because of the high rate of the urbanization averaging 8J- per.

cent a year,, the governments have been compelled to organize housing and urban development on.a-massive scale and to use the.funds available, for housing and urban development as a means of controlling the growth of slums in particular and as a check on urban development in general. Moreover, given

the generally low per capita income■of the region, the only source of finance •

is often the government. ■

60. . In Tunisia State participation in housing programmes could be described as-the best'organized. It may be said that there is not a single house built without State intervention one wayor the other. Funds for the popular

dwellings which make up the. largest proportion of the house-building programme in Tunisia are built out of funds provided directly by the budget and under

the authority of the Department of"Public Works and Housing. These fundB

are shared by all the thirteen governorates. These funds reach the owner as- a loan payable in thirty years at the rate of two per cent. Over the past

fifteen years fifty thousand popular dwellings have been built in this way and Tunisiahas now reached a stage of producing ten thousand low-cost housing units

every year. '

61. In Egypt considerable effort .is. .being made- -to -;.. ...

improve financial arrangements for • rural housing. This 1b being

reported on in detail below because of the large rural populations in Africa

and the need to stimulate effective development by promoting rural housing

through organized co-operative and self-help methods. This Egyptian project

was organized with the help of the United Nations Development.Programme.

E/CN.14/HOU/1O5

Pago 17

Financing and repayment schemes for rural housing in the Arab Republic of

Egypt - 7

. 62. The scheme, planned by the authorities concerned and approved by the

government, (in this case the Ministry of Housing and Public Utilities)

contemplates three sources of financing for the rural housing plan: the national government, the participant families, and the sponsoring agencieso The percentages contributed by each one of the sources indicated above have been calculated over the total cost of dwelling. construction, taking ' into.account the .value of the.unskilled labour given by the participants.

It has been fixed at 35O£E, the maximum cost of a dwelling to be' financed-

wi thin the scheme. ■

63, The government has authorized the banking, agencies to draw tr&m the Central Bank the funds assigned for the plan; from those funds tb.e bankB will grant.loans tp. the families participating in the projects, covering up to 60 per cent of the construction c^st; the period of repayment has been fixed at 25 years, and the rate of interest 1.5 per cent; it has been

estimated that with such favourable conditions of repayment, the instalments will not exceed the 10 per cent ofthe average income of the families

involved.1 Such families "are expected to contribute in labour and cash savings }P per cent of the expenses,, while the remaining 10 per cent will be provided by the .local sponsoring agencies, as subsidiea.

' 64^ The financing and repayment plan described above would mean that:

- loans from national funds are used to finance the necessary building materials; ■

- participant families be responsible for the provision of personal unskilled.labour, plus the financing of the skilled labour to be contracted; . ■

- the sponsoring agencies subsidize the' required technical : z assistance, which may include running expenses at

construction site, equipment, etc.

■ i ■

65« The allocation of funds through the administrative mechanism indicated above would mean that each source of money could directly control the use of its resources without interfering unduly with the other sources, vis:

- it will be easier for the banks to make loan agreements to finance the bulk purchasing of the" building materials needed for the construction of|a large number of projects, instead of evaluating the planning of several projects and provide

■financing for all component items of the costs, in each case;

moreover, bulk purchasing - if so financed - can be done before starting construction work and thus, securing the continuous flow of supplies according to the building schedules of the projects; . "

E/CN.14/H0U/1O5

Page.18

- the participant families shall be. encouraged to maximize the : ' "

contribution of personal efforts in order to reduce the

burden of financing paid labour; ' ' ■

- the sponsoring agencies shall have to .reach the maximum efficiency of operation within the limits "of the authorized

subsidies, ■ -

56. The-local.authorities of such area will procure and make available the necessary construction sites, either securing public land for" self- '

^!s"L e/Ur?C8e8' nr Purcha3inS Private properties; the expenses incurred

being covered with partial or total subsidies. ' .

Mechanisms of granting loans • ' - ■

JT r 08te«ftrieB. nf villaSe People participated active^ in the "

help housing programme; they were: ' '

- rural workers, who worked on wage or salary basis; '.some of whom "

■ owned small plots of agricultural land; ' ' - farmers,'owners of more than 1.5 feddans and up to 5 feddans of

agricultural land; the main income of this ca'tegory came from the' sale of crops, etc. the marketing of which was made through

agricultural co-operative societies operating under the auspices' '

of the government. 1/ ■

w8"i J$, fiuSt exPercise'of «* financing scheme applied in the Tillage of

flazlet El Ashter, was implemented as followings: ■

+v, „ T° fa?illnta^e ■the. panting of 'the loans approved by the government, the Agricultural Bank drew the necessary-funds from the Central Bank and ' entrusted the Agriculture Co-operative Society of the village with the. taak of distributing the loans.among the, interested families, as well as the collecting of the subsequent repayments. Membership in the co-operative, and possession of at least 1.5 feddans of.agricultural land,, were the

^Cn?^°^Pa, iCipantS tO aPply fO± lnanBi the *>lot~of lan* taken as a /JIL ?! Sn; ln°ther word8' the fusing loan was considered like agricultural purposes, and the plot. . ' . ' "

Jtl deecri^ed Pattern nf los" granting should be seen as' a first approach

a more comprehensive mechanism of rural housing financing; one «t its n limitations is that the families who .do not. meet the conditions of land possession and co-operative membership, are not entitled to be, beneficiaries

- fVJl oPi ' -3nd.that mav.^ the, situation of many of the. families under the

first category of paragraph 6?. Since.this, is a-matter of substantial

significance for the rural housing plan, -particular attention to the subject

is rec-mmended, together with the following suggestions: .. ■. auDJecx

37 T faddan - 1.038 acres = 4,2^0.833 square metres. ' '

E/CU.14/H0U/105

Page 15

- to apply in rural schemes the same type of loan guarantee utilized in urban housing., .that, is to say the clear registration of the claims of the lender in formal mortgage deeds; the mortgage should have as a single guarantee,the houses built by means of the loans, but not other properties of the borrowers or their personal credits with the . . Agriculture Co—operative Societies; - ...

- to utilize other types.of housing loan guarantee, for instance the collective liability, of a group of self-help builders to repay the debtB of. its members, even in the case that one or more of them faii

in their personal obligations; . . •. ■ .

- ,to introduce, within the bye-laws of the existing co-operative societies, a mechanism nf housing financing adapted to the above suggested types of loan guarantee; - ■,- ,

- to implement a comprehensive mechanisms of loan granting, to meet ■;

' the rural housing need, within the frame of the proposed co-operative.1

societies for village reconstruction. ...

Participants' contributions - personal'labour • " * ' .,'

■ ■ , • ■ ■ .( . ■ ■ . ' i

70. . The-self-help builders of Nazlet El Ashter have proved their ability ..

to .eon-tribute an average of 30 man-hours a week of■ labour per participating family such hours -were performed by the head.:of the family with'the help of some of, his relatives volunteering for the project. All of them learned with facility the different tasks assigned, which included: digging "of trenches, building of foundations, making of concrete blocks, preparing and laying

©f concrete floors^, helping in the laying of blocks for wall construction, preparation of.mixes, operation of concrete mixers and other equipment, and prefabrication of concrete elements for"' roofing. ' " ' ' Tl. Paid skilled workers were employed in the laying of concrete blocks, and operating, of, the block-making machine, among other"tasks; but it is quite imaginable .that .the participants- may be able, with .the assistance pf a construction.foreman,• to perform by- themselves such skilled tasks.

72. It had'.be.en estimated' that 1, 220 -man-hours of unskilled labour was

required .for^the-construction of - the designed self-help'dwellings; '|f 30 man-

hours a week are. performed'by each participant, 9.5 months wilX be needed to complete the construction.; assuming tha t skilled labour is done ,by paid

workers. .The skilled labour f^r the same dwellings amounts to 230 man-hours;

in case the participant himself undertakes ' such .works," time of construction

■will-be extended in-.about 1.7 months, with a total of 11.2 months.' '

Page. 20

/

73» The pilot project has demonstrated the capacity'of the village families to provide a substantial amount of'the labour ..needed for the construction of the new rural dwellings. Variations in the,-amount and, quality, of the work to be contributed in fiture projects will, depend,, in each case, on the social conditions of ;the group involved; the efficiency of1the technical assistance given by the sponsoring agencies, and the personal- conditions of the construe^

tion foremen and social workers assigned to-the projects. But no matter how * the needs of labour might be covered, it will be a reasonable approach to

provide, the total amount of.unskilled and skilled work required through che participants, even-if they have > finance that part.of the labour which they cannot perform by themselves. Such a responsibility will motivate the families to maximize their personal efforts., thus saving the cost of' a labour otherwise

contracted. ... ... ' ._- '

Downpayment and savings . ... ;- -.;,;,■: ■ : . ;. .

74. The contribution of downpayments before the starting of construction work has been.considered as a mean of facilitating the financing, and moreover a proof of the seriousness of the interested families towards their parti cipation in the project. Although both reasons are valid, the collection of ■ such payments proved to be difficult during the execution of the first pijot . project. In this connexion it would-be advisable to organize, well in '

advance and through the social workers and the co-operative societies' involved,- the collection of savings proportional to the paying capacity of the people,, which should be -within ten per cent of their weekly-or monthly incomes. ' - Financing'through the housing boards " ■ . . : ■ 75* Aa a general rule, the States of East and Central Africa, Kenya and - Zambia in particular, do not themselves build, but, through a Housing Board,■■

finance the housing programmes of the local authorities out of budget funds

or loans. ■ ■ ■

76. The Kenya Housing Board which consists of'f^ur. civil servants and

representatives of the various regions of the country, has a small staff that- '' is partly administrative and partly technical. " Its- main activity consists ; in making its funds available to local authorities, loans are granted for 40'' years in -Hie case of properties for rental only. 30 years, in the case- of

site servicing and 20 years in the case of tenant-purchase. The interest is ' :

0.25 per cent above the rate at which the Board obtains'its funds. The local

authorities are:responsible for repayment, the Board taking no account of'the ■

sums that the former may collect from .the'final beneficiaries, It seems that

most local authority borrowingvover "the last decade has been intended for ,the

construction of buildings for rental.' The.most important projects Realized

were the Nairobi City Council Housing-Scheme,' by which 4,900 dwellings

were built. The Kenya Housing Board derived its funds from the Government

($1.1 million), Commonwealth Development Corporation loans.

Page 21

77- Although.outside;.-the scope of this chapter, it-is interesting to observe that- the: help "given..by the Board .to local, authorities'-iB not only financial.but also technical. .The Board's staff examine ^the plans of the projects fop which its financial aid is .soughtand may, at the"request of the local, authorities, prepare,the technical files for such projects. • *

Zambia. -

.7. ■*'■ ■" -■ ■' ■ :- In Zambia," the Housing Board, which was established by order '"

in Council in 19§6, k&d powers similar to those-of its counterpart in Kenya.

However, it seems to have used its powers more widely. Its funds derive from an initial Government grant of $1*7 million, intended to start a revolving fund,, loans from. the. Government ($23.2 million by.p June 1963), and more recently from the CDC,., which'.granted a loan of fcl. million ($2.8 ■ ' :

million). ■ .. ,...- ; ... . . ._.... ... , ..- ,- ,. .;;■■■,

...The Zambian Board also has a more, active policy than the Kenyan one'-'"-""' .... ^•vot£er spheres °f authority;, most of the dwellings and ■■ estates that it;

has financed were designed by its technical sections; the Board is also

responsible for the preparation of contracts. In addition, the Board it-- ■•'' self undertakes building on a modest scale and does a considerable amount of research work., It has produced/standard designs for low-cost housing.

8°- Statutory and semi-public bodies Public agencies for housing, credit are'found mainly in former French possessions in North Africa and.south of the<-Sahara. In the'commonwealth countries, with (partial) exception of

Uganda ..housing credit' is, or was, mainly provided by the. building societies. ,

8l* Credits and. Development Banks Twelve of .-the fourteen countries south ' of the Sahara that receive considerable French assistance have for seven ■ -. ' to fifteen years, according to the individual case, possessed credit

agencies established by the .Caisse Central de Cooperation economique (CCCE).- . The State concerned has become the chief shareholder of each of these

bodies;-, it thu3 has. the power to direct its operations; the credi.t

agencies.,' like, the societes immobilieree,•which will be dealt with later, : thereby, become instruments of housing policy decided on by the State which, • while executed.within..the limits-., of funds that are more .often than not of • •■

foreign origin> nevertheless in essence .reflects the general trend of '

government policy. , ■■ . . ■ ... . .'

Purpose,of loans. . " ' . . - . . '

82. G.enerally:,speaking,, loans are granted for the foiling purposes: -■

- "f:.or|the construction of new dwellings.(this is the general rule, or

, at least,. Jhis category of loans absorbs, the largest part of the

voiume) :'...■ * . .

for the completion of dwellings under construction;

E/CN.ki4/nou/io5

Page 22 ■

for the improvement of existing dwellings (e.g. the addition of new roomn, sanitary installations, addition of a storey,1 electrical ' installations, re-roofing, etc.) These loans may also finance a

-skeleton house, consisting of the foundations, floor slab, framework

and the.roofing in permanent materials, the-infilling then being ■

executed in wattle and daub or improved wattle and daub by family

labour; this what is called construction in "semi-permanent materials"

in Niger; " .'■"'■

. tthe purchase, of building'materials; these-loans,' which are numerous,

.. make possible rertoofing, the purchase of cement, door-frames, materials

for electrical installations, etc.

83-' .. It is no.t always, easy to perceive very clearly the difference between

loans of :.the . third and fourth categories; in reality, it is mainly a

difference in amount ard,1 consequently, credit terms; the third category may

consist of relatively long-terra loans (in the terminology nf the establish- . ments. in question, this taken to mean loans f-r five years or over), whereas,

the fourth^category is made-up of short-term loans (generally for one year).

Terms ..-.-■

84, _ Examination nf the rules and regulations of four credit societies (in the Ivory Coast; the Upper Volta, Niger and Senegal) from the four

standpoints of the personal contribution required from the applicant,- the . rate,, the term of the loan,1 and the maximum amount lent shows that there are a certain number of national peculiarities, within a.common general, framework.

It- seems, a*- first sight, that diversification of terms varies inversely as- the wealth of the country, the system being infinitely simpler (and" there

fore less rigorously social) in the Ivory Coast (per capital gross domes/tie product of the order of $150) than in the Upper .Volta or Niger (per'capitaJ"

GPP of ..the. order-.of $50). ■■ '

Applicant's contribution . ■ ■"

85. In the Ivory Coast, the applicant must contribute 5 per cent of the

first $5,0po nf the estimated cost, 10 per cent of the next higher range up to.SlOjOno, 20 per cent for the range between $10,000, 20 per cent for the range between $10,oro and $14,000 and 5° per cent for-the rest, "in the Uppar Volta, a 50 per cent payment is required as from $16,000, in Niger,

the requirement is 3 per cent of the first $2,000, 5 per cent of the next, '

higher range (up .to $6,ooo), 10 per cent of the range between $6,000 and

810,01-0, then 20 per cent.up to $14,000, 30 per cent up to 20,000 and 50 per cent thereafter. In Senegal, the scale rises more rapidly, since 7 per cent is required from the low level of $2,4°0, The remainder of the scale practically corresponds to that of Niger. The personal contribution

may be in. the, form, of money (preferred'by the banks), building materials (e.g.when it is question of completing a building already begun)," or labour when the applicant and his family, for-example, fill 'in with'wattle and daub

the shell financed by the bank). ' ' ' . ■

E/CJM4/H0U/1O5

Page 23

Bates of interest

86. In the I-vory Coast, the uniform-rate is 5.5 per cent, with an increase

"f 1.5.;p0iJDtfS-^if the dwelling is n^t occupied by the applicant, 'in the Upper Volta and Niger, the interest"is 5 per cent for loans below $5,Vpn ' 6 per cent for loans, between S4,™0 and $6,000 and 7 per cent thereafter.

In Senegal, it is 5 per cent up to $4,8no. 5.5 per cent up to $10^00.

6 per .cent up ■ to $14,000, 7. per cent.up to $20,000, and 8 per cent there-' after.. In the -Upper .Volta and Senegal, there is a 2-point increase when

the dwelling is rented} in Niger, the equivalent increase is 3 points.

P7. • Terma - Generally, it is 10 yearsj in Senegal, there is a progressive tendency f«r it *> increase from 5 to 10 years. In Niger, for buildings of

durable materials, it is 15 years. ".

Maximum amount of. loan

88. The rule is that. this, ceiling is a function «f the repayment capacity,

i.e. a. combination of the interest, rate, the term of the loan, the'appli- .oanfs contribution,, and, finally, his income. in general, it is calculated'

directly in nrnnths^of earnings, or even in multiples of the assignable

portion rf the latter (between 20 arid 3^ per cent). In the case of building in permanent materials, the maximum is 25 months' earnings in the Upper ' V»lta and.Nager and 15 months' .earnings in Senegal, where however applicants forming a cooperative may apply fnr ..a loan equal to 30 times their monthly earnings.+ In addition, there are infinite variations in' the Upper Volta and

SSh^tf 'he^6tails °f ^ich.it would be idle to; enter here depending on

whether the building is permanent, semi-permanent (house-shell), or made of ' traditional materials (in Niger only tn? this latter case). The ceiling

also vanes, again in the Upper Volta ariijftger according to the applicant's

InHLr^- PUbliK OffiCial8 -toying greater, confidence than wage-earners and wage-earners, being more favoured than artisans and merchants! An l^oocI*™*™™ is sometimes fixed, but it is always relatively high:

«5P,^00 xn the Ivory-Coast (.the Caisse centrale providing only part however, the balance being subject to obtaining rediscount fro/the bank

of issue, m this case., the Banque centrale des Etats de l'Afrique de 1-Ouesi) In Senegal and Niger, the absolute maximum is fixed at S20,000^ }

Loans for the purchase of building materials ' .

fixed onmaesmn, generaUy 5 per cent (reduced to 3 per cent in N^er if repayment is made within 6 monthe);, the normal term is one year aM the

m amount granted is 3-5'^nths':- wages. . . ^

E/CN.14/H0U/1O5

Page U- . . ■

Credit procedure

overheads as

possible to reduce quality. " In

a

s •

because they have not such high

v

by nigerie"s' «

^been

house

Beneficiaries

of the. applicant'slight Occupy the'So?** ^^

. in fact one «f the conditions f^Tgating th^ loan cases are thnse in which thp «i +«, ?I s i ^

name-of the applicant andTn which he l^Z T ^

of loan8>

exao^"ablishment

fav°urable,

which is certainly

and the persona?^

replaced by pers

and usnd, the mnU^^ ac employment with an es^blished

"f security that one is

are mainly^ntended f" w

for the safest categor^

If til \7 + ^c

f gUa"n*ee

, the establishment of

^certain legal .status of the site

«*■ so.metirae8

a *hird party is possible

at tit^ * -gular

use is made of this form

^ theSe

Page 25

93. Examination of the conditions .on which loans are granted well explains this preponderance; whrle in Niger officials are particularly favoured with regard to loans (being'entitled to-a loan equal to 2_5 months of salary

whereas other wage-earners are entitled to ^nly 20 times their monthly.,

earnings), the"internal regulations of the credit establishments, without being so discriminatory, all show the same tendency. Banks and credit

societies, in fact, try as far as possible to ensure easy repayment that is . technically automatic, by using procedures such as assignment of debt or

domiciliation of wages, which can hardly apply..except to. wage .earners in the

public sector;; 'for wage-earners in the private sector, automatic payment is achieved through the employer's deducting the.monthly sum due at source.

This is less easy with merchants, .artisajiSj or members of the liberal . professions, and practically impossible with farmers.

94. In view of the preference enjoyed .by officials and wage-earners, it is'

not surprising to see that1 the capital cities take the lion's share of the

loans. Dakar, Ouagadougou'and Abidjan absorbed, respectively two-thirds, 83' .

per'cent and 9° per ceirt of - the total volume of housing credit granted ,.

during the financial years for which the Credit du Senegal, the Banque

nationale de developpement de Haute-Volta, and-the Credit de co'te-d'Ivoire ■-

have figures available. •-.'•■ . ■

95- In theory, housing loans are intended for individual persons, but,

the latter may organize themselves into co-operatives, (which is sometimes p . encouraged as in Senegal); there, for example, siz apartment houses.) .. . accountedfor $1.5 million of the 53.>2 million granted in 1961-62 (not

including cancellations). The Credit de Co'te-d'Ivoire'has granted loans to housing co-operatives and even to villages, but the experiment seems

t<-> have bern financially unfortunate. ~ ■ . 96. On the other hand, the dwellings although intended in principle for

the applicant,and his family are often let. When this happens the interest is increased... However, fairly large differences are noted from-country to .

* country. . .-In,.the iy<->ry Coast, the interest rises from 5-5 to 7 per cent when

the dwelling, is let,.all the other conditions remaining identical. In Niger, on1 the other-handj the interest is .increased,by 3i points; the'down payment', rises to 50 .per cent of the estimate, and, finally the owner must assign'

to the bank.almost ail.of the rent that be receives, which ensures : ■ ■ ;.

earlier repayment ^>f the debt. '..-.'' ...

97. In the same way, although these loans are social in nature, it does, happen that a not insignificant portion of available, sums is allocated to apartment-type buildings. In Madagascar, for example, 15 per cent of the total amount of loans has been allocated for economio dwellings, but 22 per cent for apartment-type buildings. In the Ivory Coast, an average of 30 per cent of the volume of housing credit granted over the last decade went towards buildings for rental. Finally, the credit institution sometimes builds directly for tenant-purchase, or even' rental; but, in this case,

its functions tend to merge into those of & societe* immobiliere.

E/CN.14/HOU/1O5 Page 26 " •

Savirigs'-and banking ■system'- Commercial Banks - ■ ■

98. - The Commercial Banks' ate usually/concerned with short-term and

term finance"for commerce as well as for housing which does not fall

the low-c^sts sector. In Most countries the banks give loans at higher rates.

of interest repayable in the short or medium term. Generally speaking

national policies with regard to the operations of the financial, institutions, namely tne" onnneroial "banks, mortgage .banks-, insurance companies, : Barings ■..

benfe^'etcVare not' known," thus the banks are fxes to bond ?^aJ^™**6?

they wish'. Very often, funds for housing have to compete with funds-for other'commercial purposes.' ' This makes'-the availability of long-term low. , interest and profit-free funds for housing.almost impossible. . 99. Table 1 indicates the financial costs for housing in Africa. > Ohe . very erratic changes in periods of payments as well as the annual rates

of interest would tend to show that .the basis on .which these figures have been arrived at need a close examination since economic conditions in

countries within the same sub-region,could not justify.such.wide .variations.

100. . In*this Table it "is only the organizations which lend at less than , 6 per cent-which could be used for lowest housing. Almost .all .the banks could be used as soUrc'es of finance for land development in site-and-service -schemes-and'for"both land development and the purchase of materials in self-help-schemes. From, the experience of-the North African sub-region it is conceivable that the use.of such loans .would not attract service charges which are beyond the paying capacities of the low-income groups.

Organization of integrated non-profit housing systems through

National Co-operative, Unions, Federations, etc.

101.. All the countries listed in paragraph 30 above do have co-operative- organizations of one type or the- other. As indicated earlier, co-operative activity.in Africa stated as agricultural producer and making co-operatives.;

Other consumer co-operatives such as savings and loan associations, hou*inf co-operatives/ etc. arose.ou^ of the need of the former.co-operatives to expand their economic base ' and' widen their scopes of Ration. Tfcus we have

multi-pupose co-operatives. It is estimated that the total membership ■ of co-operatives in Africa is 3& million. '

102. ■ Co-operative activity of all types is officially sponsored and supervised

by law in the following countries ,-...■'- ■

■ ■ Mauritania

ARE

Algeria Botswana Burundi

Cameroon

CAR-

■ Chad

Congo . Dahomey

Gabon Gamb ia 'Ghana

Kenya Ethiopia Lesotho .

Liberia Libya Madagascar Malawi Mali

Mauritius Morocco"

Niger Nigeria

Rwanda .

Senegal Sierra Leone Somalia Sudan Tanzania

Togo Tunisia Uganda Zaire Zambia

At the national level most co-operatives are" organized as shown in the Chart I