national markets, the low level of incomes, and the weak creditor rights and judicial enforcement mechanisms could explain this situation. Moreover, there is a need to improve the development level of the financial sector, especially the mortgage financing and banking sector. However, prospects are good since gradual financial deepening is underway in most SSA countries (Montfort et al., 2013).

Although the mortgage market in Africa is still small by international standards, the sector is growing gradually and is attracting attention from policy makers. Positive growth is now observed in some markets such as Kenya, Uganda, and others. For example Kenya's mortgage market grew by 37 percent in 2012, resulting in a total of 19,700 mortgages. Uganda, for its part, showed signs of growth at the end of December 2012, representing about 0.98 percent of GDP. According to figure 3.1 below, South Africa and Namibia remain the market leaders in SSA in terms of depth. Figure 3.2 highlights practically the same classification with a GDP value of close to zero and minimal differences among a number of countries (Malawi, Djibouti, Chad, Mauritania, Mauritius, Tanzania) with higher levels of mortgage penetration. The highest mortgage penetration in SSA is 6.48 percent in Malawi, still significantly less than many countries in the world, such as Sweden at almost 60 percent.

**Figure 3.1** : Comparative Mortgage Depth across SSA Countries (as a percentage of GDP for 2000-2010).

**Figure 3.2:** Comparative Mortgage Penetration across SSA Countries (housing loan penetration)

<!-- Start of picture text --> 35% 7<br>30% 6<br>25%<br>5<br>20%<br>15% 4<br>10% 3<br>5% 2<br>0%<br>1<br>0<br>Source : Authors’ calculation using the World Bank database on Source : Authors’ calculation using the Global Financial Inclusion<br>housing finance launched by Badev et al., 2014: “Housing finance database (FINDEX) launched by Demirguc-Kunt, Asli and Leora<br>across countries: New data and analysis,” WPS6756. Klapper (2012), “Measuring financial inclusion: The global Findex<br>Database,” World Bank Policy Research Working Paper 6025.<br>Note : Percentage of adult population with an outstanding loan to<br>purchase a home. Unlike the mortgage depth indicator, the penetration<br>index refers to any provider of housing loans, including regulated<br>financial institutions, microfinance institutions, and other formal<br>sources.<br>6.56.3 6.3 6.1<br>30.8% 20.0% 5.7 5.4 5.4<br>4.3<br>3.6<br>2.8<br>2.3<br>2.5% 2.3% 2.0% 1.2% 1.2% 1.0% 0.5% 0.4% 0.4% 0.2% 0.1% 0.1% 0.1% 0.0% 0.0% 2.1 1.81.8 1.7 1.2 1.2 1.1 1.1 1.0 0.80.7 0.7 0.6 0.60.6<br>0.3 0.3 0.20.1 0.1<br>South Africa Namibia Kenya Botswana Senegal Rwanda Algeria Uganda Cameroon Nigeria Ghana Tanzania Chad Central African Republic Gabon Guinea Congo, Rep. Malawi DjiboutiChad Mauritania Mauritius Tanzania South Africa AngolaLiberia Ghana TogoRwanda Botswana Zambia Cameroon KenyaUgandaCentral Afric. Rep.MozambiqueNigerMali Congo, Dem. Rep.Burkina Faso MadagascarBenin Gabon Congo, Rep.NigeriaGuinea SenegalBurundi<br><!-- End of picture text --> Sub-Saharan Africa is the region in the world where housing finance is the least developed. In fact, in SSA, many countries have less than 1 percent mortgage depth or do not have a mortgage market. Moreover, the most advanced countries in mortgage market development, such as South Africa (30.8 percent) and Namibia (20.0 percent), are far behind many countries in the world with a deeper mortgage market, like Denmark with 109.8 percent. Figure 3.3 below shows that annual housing demand is increasing. This could be 7