The Beninese government has made significant strides in affordable housing financing with the successful closure of the ZAKA operation by BSIC Benin. This program, carried out in partnership with BOAD Titrisation and AFINHAB, demonstrates the possibility of mobilizing long-term resources through the transformation of receivables into financial securities. The operation, presented at the first edition of the Capital Reach Forum in Cotonou, raised 15 billion FCFA, entirely placed with investors.
The ZAKA operation marks a major milestone in Benin's affordable housing sector, with Iliassou Seïbou, Director of Finance and Accounting at BSIC Benin, highlighting the achievement as a financial and social success. The 15 billion FCFA raised is the largest amount secured under the ZAKA program to date and represents its first social bond. The funds will be allocated to housing projects with a unit cost not exceeding 150 million FCFA, aiming to support both homebuyers and real estate developers.
The operation is designed to strengthen the financing capacity for affordable housing in Benin. BSIC Benin has committed to using the raised funds for housing projects that meet specific criteria, including favoring first-time buyers, rural areas, or underserved zones, and providing more accessible financing. The securitization process allows the bank to diversify its funding sources and free up capacity to grant new loans.
The ZAKA operation has been structured to secure investors, with ratings from GCR and Moody's. The Senior and Mezzanine tranches received AAA and AA- ratings, respectively, while the social bond framework was evaluated as SQS2 by Moody's. The 15 billion FCFA was fully subscribed, with investors from several countries, including Benin, Côte d'Ivoire, Togo, and Senegal.
Théodore Ganflé, Managing Director of SGI Africaine de gestion et d'intermédiation (AGI), provided insights into the subscription process, revealing that 10 billion FCFA was invested in the Senior tranche and 3 billion FCFA in the Mezzanine tranche. The Junior tranches were directly subscribed by BSIC Benin. The diversity of investors, ranging from banks to institutional investors and collective investment schemes, demonstrates the attractiveness of this structuring.
Yedau Ogoundélé, Managing Director of AFINHAB, emphasized the program's social impact, explaining that the name "ZAKA" means "house" or "home" in the Moré language. The three operations conducted under the program have mobilized a total of 30 billion FCFA, which will enable households with moderate incomes to acquire homes in Benin.
A masterclass was held to share lessons learned from the ZAKA operation, with experts from BOAD Titrisation, NSIA Banque Bénin, BSIC Bénin, SGI-AGI, and other institutions discussing the different stages of a securitization operation. The discussions highlighted the importance of coordination, trust, and commitment among stakeholders, as well as the need for thorough preparation and ongoing monitoring.
Key points
- The ZAKA operation raised 15 billion FCFA for affordable housing in Benin.
- The program aims to support households with moderate incomes in acquiring homes.
- The securitization process allows for the mobilization of long-term resources for affordable housing financing.
