Exorbitant mortgage rates in the African continent have crippled the housing market in the region. Popular crypto platform Coinbase has recently put some light on how Africa can come out of this crisis-like situation by leveraging the power of blockchain technology.
In its long Twitter thread, Coinbase specifically highlights the innovative efforts of the Cardano-powered decentralized finance (DeFi) platform Empowa which aims to effectively tackle this crisis of housing affordability in Africa.
By tapping into NFTs and blockchain technology, Empowa aims to make homes more accessible to Mozambicans and will also overhaul the country’s much older loan .
3/ Enter: @empowa_io, a company making homes more accessible to Mozambicans by tapping into NFTs and blockchain technology to update an antiquated loan . They work in partnership with @CasaReal13 to construct cyclone-resistant homes in central locations.
— Coinbase 🛡️ (@coinbase) May 12, 2023
To push further this initiative, Empowa has set further an ambitious goal of enabling 1 million African families to become owners of climate-smart homes by 2030. The company is determined to further disrupt the current real estate market of Africa that’s ridden with high mortgage rates.
In the African country of Zimbabwe, the rate stands at almost a prohibitive 45 percent, as per data from Empowa. Such huge financial costs have also perpetuated a vicious cycle of unaffordable housing across the continent.
In its white paper, the Empowa team has underlined the severity of the issue while stating that low levels of investment, short finance terms, high-interest rates, etc. have resulted in extremely high cost of capital.
As per the 2020 Centre for Affordable Housing (CAHF) Annual report, the mortgage rates in Zambia have surged to 32 percent, while it’s the least in Guinea, Nigeria, and Zimbabwe at 25 percent.
Last week, Coinbase reported about the critical situation in Mozambique, where mortgage rates have shot to as high as 22 percent. Thus, despite the sufficient income, locals staying on the coastline aren’t able to buy a house loan due to their income being informal instead of being salaried. As a result, the locals have resorted to hand-built shelters which got destroyed by a cyclone.
In partnership with Casa Real, Empowa is leveraging NFTs and blockchain technology to revamp this outdated loan . It seeks to build decentralized funding models and NFT technology wherein individuals can purchase a home without having to obtain a traditional mortgage.
These cyclone-resistant homes will start at a price point of $10K and will be affordable to low and middle-income families.
