ZAMBIA NATIONAL BUILDING SOCIETY PRESENT ATION TO THE IHA AFRICAN CHAPTER BY:CHARL ES SHANEN GETA MANAGE R PROJECT S & INVESTM ENTS ZAMBIA NATIONA L BUILDING SOCIETY( ZNBS) TOPIC: “STATE OF HOUSING INDUSTR Y IN ZAMBIA ”

BACKGROUND Zambia National Building Society was established in 1970 by the government through an act of parliament. The main objective of establishing the society is to provide housing Finance with the aim of increasing the housing stock in Zambia. ZNBS offers banking services and has a branch network of 19 branches countrywide.

Vision To become the premiere housing finance institution with the majority market share in Zambia

Mission Statement To provide quality, affordable and sustainable Mortgage finance, financial services and other allied services for the benefit of clients, stakeholders and the Society.

ZNBS OPERATIONS Mortgage financing is the core business of ZNBS ZNBS is the largest building society with over 64% market share of the building societies' mortgage book in Zambia. ZNBS provides housing finance to members of the public for the purpose of outright purchases, building and renovations. Managing revolving scheme loans for various institutions.

HOUSING DEMAND Zambia faces a current housing backlog of 1.5 million units expected to reach approximately 3 million by 2030 houses due to the following: Population growth of about 2.5% -4% per year. Currently estimated around 15.5 million and projected to increase to 24.9 million in 2030, Urbanization

HOUSING DEMAND large untapped residential market for affordable housing Large market for house upgrade to decent and acceptable standards -challenges of unplanned settlements with Lusaka alone accounting for 50% of the population living in unplanned areas 34 newly created districts facing the most critical housing shortage. The prevailing market preferences from low and middle income buyers is a 2 to 3 bedroom cement brick & mortar accommodation.

DEMAND CONSTRAINTS Inadequate availability of low cost and medium cost housing finance. Low income households in urban areas can purchase a house costing between K60 000 and K100 000 (US$6 000– US$10 000) Developer not providing affordable houses. Private Developers are building in the range of US$60 000 and US$100 000 for a 2-3 bedroom house.

HOUSING SUPPLY Zambia’s existing housing stock is estimated to be 2.5 million units of which 64 percent is rural and 36 percent is urban housing The national annual production rate of about 73 000 units per annum falls far below the national requirement of about 150,000 low to medium housing units per year (6th National Development Plan). Incremental- Self-Built houses with the use of savings or external finance accounts for a larger proportion of housing supply. Currently 75% of ZNBS mortgage portfolio are building cases,15% purchase, 10% renovation.

HOUSING SUPPLY State institution such as NAPSA NHA contributes less than 1000 housing units per annum. The recent 418 NAPSA Kalulushi housing complex on the Copperbelt province and the Northgate Housing Complex in Lusaka had most of the units remaining unoccupied for a long time due to the high cost of completed units Private developers on the market such as Roma Park, Foxdale, Lilayi Estates, Silverest Gardens, Roma, and Vorna Valley contribute less than 3 000 completed units per annum - - mostly focusing more on the high end of the housing market. Other private player such as Nkwashi and Salama park only provide serviced plots and not complete housing units (Need for housing finance)

HOUSING FINANCE SUPPLY (key mortgage lenders). Zambia National Building Society The Pan African Building Society (PABS), Finance Building Society (FBS), First National Bank (FNB), Stanbic Bank Madison and Meanwood Finance

SUPPLY CONSTRAINTS Lack of affordable long term capital finance for lending which would benefit more people. High lending interest rates due to the high cost of funds. Currently the interest on house loans range from 22.5% to 40% Land acquisition constraints for people wishing to build houses Public institutions tasked with facilitating housing inadequacy Resourced Lack of provision of adequate affordable housing for all income groups in Zambia, private developers biased towards the high end market”. (Mismatch of income and mortgage entitlement)

ZNBS INNOVATIONS Mortgage loans range from K3,000.00 to K700,000.00 with repayment periods of 2 to 15 years making them affordable to the low income learners. The mortgage interest rate is variable and currently at 22.5%pa, being the lowest on the market.

ZNBS INNOVATIONS For customers without security documents, they have the option of obtaining short term loans through the banking division ( building material loans and friendly loans Short term loans can be refinanced with a mortgage once security documents are in place.

ZNBS INNOVATIONS ZNBS is a one stop shop for mortgage services. In house services provided include: Property valuation by qualified surveyors Legal services, preparation of reports on title and mortgage conveyancing documents ZNBS has signed MOU'S with a number of institutions

ZNBS INNOVATIONS ZNBS has realized that most homes are self built, most Zambians opt for direct labour and incremental method of construction. Building loans are therefore promoted. Currently 75% of the mortgage portfolio are building cases,15% purchase, 10% renovation.

ZNBS INNOVATIONS ZNBS has been partnering with construction companies through the provision of mortgage financing who are willing to build low and medium cost houses. Partners involved are able to: Source for land Construct houses Service the areas and Process individual titles

RECOMMENDATIONS An apex institution where institutions like ZNBS can borrow funds for housing with affordable interest rates for onward lending to citizens in low to medium income brackets. Mobilization of cheap long term finance by stakeholders from the capital market Government to continue creating an enabling environment to provide affordable, quality and adequate housing finance by: Encouraging Public-Private partnerships (PPPs) in the housing development and construction

THANK YOU.