IFC Investment, New Toolkit to Help Develop Mortgage Lending in Ghana

IFC, a member of the World Bank Group, announced today that it will invest in three banks as part of its Ghana Mortgage Market Initiative, which is designed to boost residential mortgage lending and provide better access to housing finance for Ghanaians. The banks will also be the first institutions globally to begin using the innovative IFC Mortgage Toolkit.

IFC will lend $25 million to Ecobank Ghana, Fidelity Bank, and Merchant Bank Ghana. The senior debt of up to 15 years will be denominated in U.S. dollars or Ghanaian cedis, representing the first local currency financing provided by IFC in Ghana. The loans will be used to increase the banks’ mortgage lending activities, as well as provide housing solutions for about 500 families and over 3,000 individuals.
Edward Effah, Fidelity Bank’s Managing Director, said, “This IFC investment will make mortgage lending more fluid, creating opportunities for Ghanaians.”

Frances Adu-Mante, Ecobank Ghana’s Executive Director, Retail Banking, said, “The fact that our valued customers can secure longer-term mortgage financing is very important to us. We are happy to partner with IFC to enhance the scope of financial intermediaries in Ghana.”

Jyrki Koskelo, IFC Director for Global Financial Markets, said, “Developing the Ghanaian housing sector is vital for the growth of the country’s financial markets and economy. The IFC Ghana Mortgage Market Initiative supports our efforts to scale up housing finance in Sub-Saharan Africa. Providing 15-year loans in local currency is also a landmark for IFC.”

IFC, in partnership with SECO, the State Secretariat for Economic Affairs of Switzerland, is already providing advice to the three banks on developing and implementing standard mortgage products, origination and servicing policies, and industry guidelines. It is also working with other key stakeholders to address legal, regulatory, and constraints to growth of mortgage lending and investing in Ghana.

To support its efforts, IFC has developed a mortgage toolkit to help lenders build internal capacity, improve risk management, and facilitate more lending for mortgage finance. The IFC Mortgage Toolkit provides guidance on introducing new mortgage products, helping lenders establish standard loan documents and implement key steps for originating, processing,closing, and servicing mortgage loans.

All firms in Ghana receiving IFC support for housing finance will be required to use the toolkit. Widespread use of the toolkit is expected to lead to broader acceptance of standard mortgage lending practices.