Financing for low-income housing

Appropriate approach in Tanzania

  • N.D. Makoba


Today's tenants expect to be tomorrow's home owners. However low-income earners have found housing ownership to be a problem. One of the problems hindering home ownership, whether own built or purchased is finance. It is the aim of this paper to determine the appropriate approach of housing finance for low-income housing. Simulation models have been used to determine the appropriate approach of financing low-income housing considering different financing options available.

 Three approaches have been considered, which are: own financing, loan financing and rent as a subsidy to finance housing. A combination of the approaches have been used in the simulation to find a suitable method. A suitable method have been measured by period required to complete a house. A combination of financing options of Save and Build” “Save, Borrow and Build”; “Save, Build, Rent and Build” and “Save, Borrow, Build, Rent and Build” have been considered. It has been concluded that a combination of own financing, loan financing and rent as a subsidy is a more efficient approach. Rent as a subsidy have been shown to has a bigger impact on completion period of a housing unit.


Author Biography

N.D. Makoba

Dr. N.D. Makoba is a Lecturer, Department of Building Economics, Ardhi University, Dar es Salaam, Tanzania.  His contact address is P.O. Box 35176, E-mail: