FSD Africa invests £1.6 million in African housing finance
FSD Africa announces that it is to acquire a 25% shareholding in Sofala Capital Pty Limited, a housing finance catalyst based in Cape Town, South Africa. The £1.6 million investment will help Sofala scale up its provision of construction mortgages in both Zambia and South Africa.
The commitment to Sofala is part of FSD Africa’s on-going work to support the expansion of accessible housing finance across sub-Saharan Africa. The commitment includes an £850,000 equity investment, which will be reinvested in Sofala’s two operating businesses, Zambian Home Loans Limited and iBuild Home Loans Pty Limited, thus strengthening their balance sheets and enabling them to achieve scale.
Building materials for inceremental house building in peri-urban Lusaka, Zambia
In addition, FSD Africa will make available a US$500,000 credit line to ZHL to allow it to offer a new product for dollar-earners in Zambia, as well as diaspora Zambians looking to invest in their home country.
Mark Napier, Director of FSD Africa said: “Housing plays a critical role in economic development, beyond providing shelter, privacy and physical security for home occupiers. Sofala has demonstrated a strong commitment towards innovation in housing finance. If we are to unlock the economic and social potential that well-functioning housing markets can deliver, it is essential that we support innovative thinking in this area”.
Michael Waller, Sofala’s Managing Director, said: “We are delighted to welcome FSD Africa as a shareholder in Sofala. The investment, structured flexibly as a mix of equity, loan capital and grant finance, is transformative for Sofala and positions Zambian Home Loans and iBuild Home Loans for significant growth”.
FSD Africa believes that its support for Sofala will generate important economic and social impacts, crowding local currency investment into ZHL and iBuild SA, creating and sustaining jobs through construction projects and making available decent accommodation, including for low income tenants.
The full press release can be accessed here.