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African Development Bank promotes better access to mortgage finance in Ghana

THE African Development Bank (AfDB) has approved a $15 million senior loan to GHL Bank PLC, which focuses on mortgage finance, to enhance its mortgage loan portfolio and help develop an effective affordable mortgage finance sector in Ghana.

Ghana’s lower-middle and middle-income earners will now have greater access to long-term affordable mortgage finance. GHL Bank PLC was previously the only specialised mortgage finance institution in Ghana, helping to address the national housing shortage by providing long-term finance to lower-middle and middle-income new homebuyers. It has disbursed over $191 million in mortgage loans, benefiting more than 3,000 households, serving the majority of Ghana’s urban and suburban centres.

The senior loan will have multiplier effects on housing sector industries and employment in the mortgage value chain. It will complement the government’s efforts to develop a self-sustaining long-term affordable mortgage market and encourage orderly urban development for providing basic utilities such as water, sanitation, roads and electricity.

The intervention is in line with the Bank’s High 5 agenda and specifically ‘improving the quality of life for the people of Africa.’ It complements the Bank’s current initiatives to support affordable housing and development of mortgage finance institutions in Africa. The Bank supports investments that help widen and deepen financial systems in Africa, and that enable the private sector to mobilize and access long-term local currency funding from local financial and debt markets.



  1. The bulk of Ghana’s 1.7 million housing deficit (about 80%) is in the low-medium income group because of affordability in the face of relatively low level of income of the people. This means, affordable housing to meet the income demand of the low-medium income group cannot be built or are not being built within the current economic environment to satisfy this group mainly because of relatively high construction cost and expensive mortgage finance. Due to this, all the existing real estate developers and GHL are forced to serve an already saturated market of medium-higher income clientele. Business is therefore poor for the existing real estate developers and GHL and it was mainly because of this that GHL eventually had to convert into a commercial bank to survive and leave Ghana with no dedicated mortgage provider..

    AfDB giving mortgage funds to GHL for affordable housing market that does not exist to me seems futile. The solution must be a comprehensive approach whereby an “enabled environment” is created within this economic chaos to provide low-cost housing and then cheaper mortgages finance to meet the demand of this low-medium income group. Without that, any mortgage funding meant to help the lower-medium income group, will inadvertently end up serving the wrong market.


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