FINANCIAL services giant, Fidelity Life Assurance, joined the push for affordable housing yesterday with the launch of Vaka Yako, a United States dollar-indexed investment product that could reshape Zimbabwe’s housing market.
The scheme, which was announced in Harare, cuts across social strata, giving policy holders an opportunity to determine the premiums they pay, depending on capacity, age and other factors.
But what sets Vaka Yako apart from other housing schemes is that investors will not be made to pay hefty deposits which has affected uptake in most privately-run schemes in Zimbabwe. More than 1,2 million people are on the housing waiting list, according to Fidelity’s sales and marketing manager Edwell Gondo.
It is the latest in a series of housing projects undertaken by the listed insurance outfit in the past decade, including the Fidelity Southview medium-density residential project in Harare.
Gondo said one of the most important lessons from the project was the need to develop flexible, all-encompassing investment products that would not exclude low-income earners.
With over 5,7 million people now relegated to the informal sector following a decade of de-industrialisation, many Zimbabweans don’t qualify for most schemes because they don’t hold formal jobs.
Millions more have been relegated because they don’t have collateral, a key requirement for housing schemes in most markets.
“At Southview we had 5 000 stands, but it took us two years to sell them because some people with the ability to pay were in Bulawayo or in Mutare and they were not prepared to come to Harare,” Gondo said.
“Vaka Yako gives people the freedom to build their houses wherever they want in Zimbabwe at an affordable cost. We have discovered that there is high appetite for modern houses. We want to help people achieve this goal. Private developers gave people stands, but people found it difficult to pay deposits. With Vaka Yako, the challenge of raising deposits will fall away,” he said.
Despite the challenges being faced by low-income earners, the appetite to develop tailor-made schemes to suit their capacity has been increasing.
In November, government signed a host country agreement with Nairobi-based pan-African housing development financier, Shelter Afrique to roll out an ambitious project to construct 220 000 housing units to accelerate and promote affordable human settlements
Shelter Afrique managing director Andrew Chimpondah said the plan was to accelerate “financing of projects to provide affordable housing” for Africa.