Interview with Ms. Yedau Ogoundele, Director General of the WAEMU Regional Mortgage Refinancing Company

How did CRRH-UEMOA come about? What is its purpose and how does it work?

CRRH-UEMOA is an initiative of the West African Development Bank (BOAD), the WAEMU Commission, the Central Bank of West African States (BCEAO), and the West African Monetary Union Financial Markets Authority (AMF-UMOA) to come up with a solution that would enable banks in the subregion to meet the urgent need for decent housing for middle- and low-income families.

Once it became clear that the major obstacle to offering home loans is the difficulty banks face in accessing long-term resources, the purpose of CRRH-UEMOA since it was created in 2010 and began operations in 2012 has been to serve as a clearing house for decentralized banks and financial systems within the WAEMU space. The way it works is simple: it raises long-term resources on financial markets or from development  partners to refinance home loans, thus enabling banks operating in the community space to access the resources they need to develop long-term housing loans at affordable rates for their customers. With the support of the World Bank, we scaled up our operations and expanded our reach to micro finance institutions, so that low-income households and households with irregular income flows could also get the mortgages they need to build their homes.

What are the challenges to accessing housing loans in the subregion?

There are several hurdles when it comes to housing, most of them related to the institutional and regulatory framework. The first hurdle is weak infrastructure, which means there are few serviced lots to be had. Plus, access to property titles is often a long, difficult, and costly process.

The highest hurdle for banks is accessing the long-term resources they need to enable them to grant mortgage loans, including long-term loans to their customers. CRRH-UEMOA offers them a chance to access long-term resources and build their portfolio.

And then there are the families, especially middle-, low-, or irregular-income households, whose main hurdle is financial inclusion, and by that, I mean having access to the financial sector.

What has CRRH-UEMOA’s journey been like since its inception and what are the big challenges to growing the market for mortgage loans?

When CRRH-UEMOA began operations in 2012, we went to the capital markets of the Regional Securities Exchange (BRVM) for our initial 10-year bond issue. Over time, we were able to offer longer maturities on our bond issues, of 12, then 15 years. Our latest issue was in January 2023. At the same time, we embarked on a venture with funding agencies, including the World Bank, to access concessional loans at attractive rates. This allows us to offer banks and micro finance institutions long-term financing at competitive rates they can pass on to their customers.

Our main challenge is finding banks with mortgage-loan portfolios comprised of actual mortgage loans and not consumer loans used to purchase homes—reason being they need to have customers who can provide them with property titles they can use as collateral.

How would you assess the innovations CRRH-UEMOA has brought to the community space so far?

The main innovation is the fact that we are a mutually supportive system of banks coming together to launch this venture with backing from major institutions such as BOAD, BCEAO and AMF. It means the CRRH-UEMOA is strong enough to raise long-terms resources at attractive rates on the markets. Funding agencies also found in CRRH-UMEOA a trusted partner, which meant open access for CRRH-UMEOA to concessional financing. Now, that is something new.

CRRH-UEMOA was the first initiative of its kind in Africa, at the same time as a similar institution in Tanzania. Other countries then followed suit, such as Nigeria in 2013 and Kenya in 2018. We’ve spread to the eight WAEMU countries, unlike other institutions, which operate in only one country. We have 58 banks with an equity stake, that’s almost two-thirds of the banks in the Community space, holding two-thirds of the capital; the remaining third is held by BOAD, the International Financial Corporation(IFC), ECOWAS Bank for Investment and Development, and Shelter Afrique.

How many people have benefited from your loans so far in the WAEMU space and what impact have you had?

So far, 12,000 people in the WAEMU zone have benefited from our affordable-home loans financed by the World Bank. A recent impact study showed borrowers were men and women alike in the 40 to 60 age range, earning under CFAF 400,000 a month. They all used to rent or live with relatives and couldn’t afford a loan. Now, they own their own homes and live there with their families. And let’s not forget all the jobs created in the small construction businesses, when you consider that most of them built their own homes.

In addition, the financing from the World Bank served as a platform from which we were able to mobilize twice that amount—275 million dollars in 2023—through regional and international bond issues. We were able to expand and supplement our concessional resources so our partner financial institutions could offer their customers more flexible conditions.

What next can we expect from the CRRH? What does the future look like from your perspective?

We’re currently implementing a five-year strategic plan (2023-2027) that will enable us to make an even greater impact and triple the achievements of the past 12 years. Refinancing mortgage loans will continue to be our core business at CRRH. At the same time, however, we’ll be developing new products to meet banks’ needs, including a regional guarantee fund that will enable them to cover their risks, as well as a mortgage-loan portfolio securitization solution. We also hope we’ll be able to expand our footprint by extending our business beyond our shareholder banks and micro finance institutions.

What’s your favorite part about this regional project?

Whenever I look back at what we’ve been able to achieve through the project financed by the World Bank, there are two things that stand out for me. The first thing is we managed to consolidate our equity share to expand our business and make a major impact in the WAEMU zone. Then, and this means the most to me, I’m proud of what we’ve come to mean for families, especially poorer families, and the fact that thousands of people have managed to own their own homes. Now, that really makes me proud!