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Ulviyya Poladova

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Speaking at the World Urban Forum, Kecia Rust, Executive Director and founder of the Centre for Affordable Housing Finance in Africa, said affordable housing remains inaccessible for millions of people because traditional financial systems fail to recognize the realities of informal incomes, AzerNEWS reports.

Speaking about housing challenges across Africa, Rust explained that the majority of households in many African countries earn their incomes informally, making it extremely difficult for them to qualify for traditional bank loans or mortgages.

"Within the African context, the majority of households earn informally," Rust said. "Their ability to access credit and finance is limited because the bank wants them to have a payslip that says how much they earn every month."

According to Rust, this disconnect between informal economic realities and formal financial requirements excludes millions of families from the housing market, even when they have the willingness and ability to pay gradually over time.

Unable to access formal housing finance, many households resort to building homes incrementally using money borrowed or collected from relatives and community networks.

"They build the housing themselves with money that they collect from different places - from their aunts and their uncles and so on - over a long period of time," she explained.

As a result, families often begin with a single room and slowly expand their homes over many years whenever additional funds become available. While this approach allows households to secure shelter, it can create challenges in rapidly urbanizing cities where safe, high-quality, and well-planned housing is urgently needed.

Rust noted that long-term self-construction processes can negatively affect housing quality, particularly in dense urban environments where infrastructure and planning standards are critical.

"There is demand for affordable housing, and there is even the capacity to pay," she stressed. "But getting finance becomes so difficult because the way households earn their incomes is unacceptable to lenders."

The expert argued that financial institutions must rethink their approach and develop more flexible lending products tailored to the realities of informal workers and incremental housing construction.

“I think lenders need to change their products so that they recognize the way people earn an income and offer finance that is appropriate for the way they build their houses,” Rust added.