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IFC and World Bank to Help Provide Affordable Housing in Afghanistan


Kabul — IFC and the World Bank, have organized a workshop in Afghanistan to present the findings of a study on the country’s housing sector. The study outlines the environment in which financial institutions operate and assesses both mortgage and nonmortgage, or noncollateralized, housing finance.

The workshop established an action plan to improve access to housing finance and promote the sector over the next 12 to 24 months. The study was presented to a wide group of stakeholders, including government officials, governors of the central bank, and CEOs of commercial banks and microfinance institutions.

On the basis of the findings, workshop participants identified a list of short- and medium-term interventions and set up a task force to champion specific reforms. The proposed interventions include the introduction of a guarantee facility, a developer-finance program, a mortgage law, and improvements to the foreclosure law, land titling, and registration systems that include reduction in registration costs. There were specific recommendations to introduce microfinance loans for home renovation, construction, and purchase. Topic discussed included the need for market research, provision of extensive advisory services and longer-term funding, and facilitation of partnerships between banks and microfinance institutions.

“Housing is a critical issue in Afghanistan’s urban development, and the destruction caused by years of wars has made it a huge priority for us,” said Eng. M. Yousaf Pashtun, Afghanistan’s Minister of Urban Development.

Syed Farhan Fasihuddin, IFC’s Program Manager for housing finance in the Middle East and North Africa, added, “While it is important to start removing obstacles that prevent a mortgage-enabling environment, it is critical to meet the immediate and growing housing needs of Afghanis through noncollateralized microfinance loans.”

Afghanistan is facing unprecedented population growth and rapid urbanization, which is widening the gap in demand and supply of housing in urban areas like Kabul and Jalalabad. Increasing access to housing finance is key to developing a large scale housing market and addressing housing supply shortages. This project, which evolved from an agreement signed by IFC and Afghanistan’s Ministry of Urban Development, is implemented by IFC Advisory Services in the Middle East and North Africa—PEP-MENA—and the International Development Association.


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