Press Releases

IFC to Explore Expanding Residential Mortgage Lending in Ghana

In Accra
Samuel Dzotefe

Tel.: +1 (233) 21 783094

Fax: +1 (233) 21 776245


In Washington, D.C.

Michael Bookstaber

Tel.: +1 (202) 473-6781

Fax: +1( 202) 974-4459


Georg Schmidt

Phone: +1 (202) 458-2934

Fax:     +1 (202) 974-4384


January 25, 2005, Accra, Ghana—The International Finance Corporation, the private sector arm of the World Bank Group, has launched a two-year technical assistance project with a view toward sparking new residential mortgage lending in Ghana. The Swiss State Secretariat for Economic Affairs (seco) has provided initial support.

IFC and four of Ghana’s major financial institutions – HFC Bank (Ghana), Ecobank Ghana, Fidelity Discount House, and the Social Security & National Insurance Trust – have signed a memorandum of understanding that calls for long-term local currency mortgage funding under uniform guidelines and practices, based on international standards.  The framework will apply to all investors and lenders participating in the funding initiative.

The memorandum calls for a comprehensive market analysis of growth factors for mortgage lending in Ghana.  Funded by a $125,000 grant from seco, the study will allow participants to assess opportunities in the local mortgage business and provide a basis for market development. As a further step, the memorandum recommends the establishment of a mortgage funding trust, into which institutional investors would channel long-term loans that banks could use to finance mortgages. A home construction funding corporation is proposed as an additional tool to help finance infrastructure measures in large-scale housing projects. IFC will consider providing partial credit guarantees to the trust and the corporation.

The memorandum builds on Ghana’s recent economic stabilization and reduced interest rates, which have improved the climate for mortgage lending.  In the past, Ghana’s mortgage market was hampered by high inflation and high interest rates.  Sources of long-term investment funds, which are important keys to sustainable mortgage lending, had dried up, and the mortgage business focused primarily on foreign currency denominated loans for property investments by Ghanaians living overseas and the very small number of locals who could afford such transactions.

Ghana’s Acting Deputy Minister of Finance, Dr. Akoto Osei sees this development as “truly one of the most creative and innovative ways to bridge significant gaps in the financial market and move all significant players in the same direction.”

IFC Director for Sub-Saharan Africa Richard Ranken, noted, “This groundbreaking project has the potential to expand Ghana’s housing finance market significantly. It also reflects IFC’s revamped strategy in Africa, which seeks to align technical assistance with investments. In this case, technical assistance will be provided both before and after the investments in order to support the entry of lenders into residential mortgage finance."

Jyrki Koskelo, IFC director for Global Financial Markets, welcomed the initiative: “If successful, it could help break the deadlock in Ghana’s mortgage market. Ultimately, the real challenge will be to broaden participation and include a wider array of banks and institutional investors.”

The mission of IFC ( is to promote sustainable private sector investment in emerging markets, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in transition and developing countries, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.