This presentation based on “Promoting Social Protection Through Empowered Communities”
• The Muslim world represents 1 of 4 humans on the planet
• Nearly the same share in a number of countries
• Represents 1 of 2 poor on the planet
• An acute challenge of widening demand/supply gap and rising housing backlog… leading to Social Unrest
• Most of the housing backlog and short supply is in the low-income segment of the population
• Population growth and urbanization are further compounding the existing huge backlog
• Rising costs (land, construction, construction materials) are making housing unaffordable for the poor
• IDB study suggests housing needs of the Muslim World at 8 mn units, nearly all in Low-Income Segment
• The estimate needs further analysis and breakdown
• MENA 3.2 mn;
• Asia 2.7 mn; and
• Africa/others 2.3 mn.
• Shortage: Egypt 1.5 mn, Iraq 1.0 mn, Morocco 0.6 mn, Saudi Arabia 0.4 mn
• Significant oversupply in upscale or luxury housing only, while low-income segments/communities remain neglected
• Urban population likely to rise from 1/4th to 1/3rd of total
• Rapid urbanization is a major issue in low-income housing
• Need for new housing of 8 mn due to population growth is based on 5-5.5/HH and population growth at 2.5%
• Urbanization and population growth further increase the year-on-year housing needs in major metropolitans
• Supply is 30-40% on new demand for housing
• ME Countries: Recent civil uprisings in some countries have brought to the surface the social issue of low-income affordable housing
• Nearly all countries in the region have allocated huge funding and have initiated plans and projects to address it
• Most of these programs are based on State Subsidy, and thus would not be viable and sustainable in the long run.
• Indonesia, over the years has developed and implemented a very comprehensive program of State Subsidized Pro-Poor Housing.
• Africa has a unique challenge of Low-Income housing, with challenges of Affordability, HMF, major Slums, etc.
• In many African Countries, the largely Muslim population is a candidate for Sharia-Compatible Housing Finance
• Asia, having Muslim countries like Pakistan, Afghanistan, Indonesia, and Malaysia, where most of Muslin courtiers in Asia are faced with the challenge of low-income affordable housing shortage and answers have no match with the solutions,
Muslim World is faced with a bigger challenge
• As most of the housing shortage is in low-income segment, low-income segments/communities need empowerment through housing finance
• Nearly 1/5th of the population in the Muslim World is a candidate for
HMF
• Need for Faith- Sharia-Compliant Financing Models
• Challenges of Rapid Urbanization and growth of low-income communities
• Institutional Housing Finance is either non-existent or in the infancy stages in most of the Muslim World (Afghanistan and some African Countries)
• Slightly advanced in some others (Malaysia, Turkey, Egypt, Morocco, Indonesia, Pakistan and Saudi Arabia)
• Regulatory Framework needs strengthening
• Additional challenges include:
• Role and responsibilities of Specialized Housing Finance Institutions
(HFIs) and Commercial Banks (CBs)
• Long Term Liquidity Facility Institutions and Instruments
• World population expected to reach between 7.9 to 10.9 billion by 2050
• By 2030, nearly 60% of the world’s population will be urban, and nearly ½ will comprise of urban poor living in poor habitats and in slums
• Urban growth rates highest in the developing world, absorbing an average of 5 mn new urban residents/month
• Responsible for 95% of the world’s urban population growth
• Factors contributing to urban migration are: greater economic growth, rising income levels, employment opportunities, immigrant workers, the occupational shift from agriculture to manufacturing and services, and changing attitudes toward consumption and lifestyle
• Changing family culture and shrinking household size.
• Help promote social and economic inclusion
• Enhance the resilience of communities to external
shocks
• Create vibrant communities that can cope with and address risks and realities
• Look at country experiences as well as the lessons and recommendations from these experiences
• Housing as a foundation for breaking the poverty cycle