Impact Investing | July 7, 2023

Empowa: Affordable housing for Mozambique’s informal economy

David Bank
ImpactAlpha Editor

David Bank

David Bank chats with Empowa’s Glen Jordan in the next conversation from the recent “Connecting Capital to Communities” gathering at the Salzburg Global Seminar, sponsored by the Robert Wood Johnson Foundation. Host Brian Walsh has the headlines. 

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In Mozambique, a country of 32 million, only 600 families have mortgage loans. For almost all of the rest, home ownership has been far out of reach. “When there’s no formality, there’s no identification. Income is informal. The mortgage product just doesn’t work,” says Glen Jordan of Empowa, a Netherlands-based social enterprise.

“So we have to turn it around and create products that meet the needs of the informal market. And create structures that enable the capital to flow to those structures in a way that’s cost-effective.” Empowa is a capital provider to developers like Casa Real, which is building climate-resilient houses that sell for $10,000 per unit. Empowa’s rent-to-own model lets residents build equity over time. 

For Zimbabwean-born Jordan, affordable home ownership is a means to an end. “How do we alleviate poverty? How do we enable people who aren’t formally employed, who are hustling, how do we get them to create wealth?” he said. “It’s actually not because people don’t have money. It’s because of the systems.” Empowa uses blockchain technology to record payments and transfer value to residents, creating an immutable record.

Rather than rely on credit ratings or income statements, he says, “All of that enables us to be forward-looking.” The project’s pilot has placed 30 families, who already have gained equity of about 5% in their homes, with a 99% payment rate. Residents describe “the ecstasy of that opportunity that they never thought they would have in their lifetime,” Jordan says. “The demand is almost unlimited.”