Diaspora Kapita to issue mortgage bonds in 2024
PAN-AFRICAN investment firm, Diaspora Kapita is targeting to issue diaspora bonds beginning in 2024 to address the persistent challenges faced by the diaspora community in securing mortgages in Zimbabwe.
Chief executive officer Vhusi Phiri says obstacles such as high deposit rates, short payment durations, and stringent loan conditions were major impediments for Zimbabweans to access mortgage financing. This has created scope for the company to initiate the plan to ease the challenges.
“The potential impact of a well-structured diaspora mortgage scheme on the Zimbabwean economy is substantial. While the diaspora is already involved in property purchases, facilitating a larger number to do so could have ripple effects in the construction sector,” he said.
In collaboration with a select Zimbabwean financial institutions Kapita subsidiary, Tsigiro Usekelo, will offer long-term mortgages, initially spanning up to 15 years.
According to the group, clients of Tsigiro Usekelo will only need to contribute a 10 percent deposit. The company envisions the diaspora mortgage initiative as a US$4 billion opportunity, capable of supporting up to 100,000 households. Most of this funding will be sourced externally.
Already, Tsigiro Usekelo is finalising a collective investment scheme, the Tsigiro Usekelo Property Fund, in partnership with local financial institutions.
The fund's purpose is to provide additional security to mortgage providers or funders. Prospective diaspora mortgage seekers seeking better terms will be required to become members of the fund, which is currently undergoing registration with Zimbabwe's regulatory authorities.
“Diaspora bonds offer local investors a long-term investment in hard currency, reinforced by additional security from the Tsigiro Usekelo Property Fund. The fund will also offer liquidity support, addressing challenges faced by local institutions when diaspora communities temporarily struggle with payments,” he said.
Diaspora Kapita is also collaborating with property developers and financial institutions in Zimbabwe to ensure a variety of property options for diaspora clients across the country. Mr Phiri added that the company is also engaging the Government and proposing public-private partnerships to bolster diaspora-led investments.
Diaspora Kapita – an investment holding group focused on identifying, acquiring and building a portfolio of sustainable growth assets in Sub-Saharan Africa is targeting the first quarter of 2024 for its listing.
The group is mainly focused on investing in mining, property development, agriculture, funeral services, health and financial services. Recently, the group announced plans to list on the Victoria Falls Stock Exchange early next year, as the company seeks to widen its net of investors and raise funds for its project pipeline.