The Nairobi Securities Exchange is set to leverage Cardano’s blockchain technology to address Kenya’s severe housing shortage.
In collaboration with Empowa, the NSE plans to create Real World Asset (RWA) tokens for affordable housing. RWA tokens will enable capital raising and track ownership, cash flow, and returns, ensuring accountability and trust.
Kenya’s Housing Shortage
Kenya has only 27,786 mortgages for a population of about 55 million people. The housing market faces significant challenges, including an annual housing gap of 250,000 units and an urban population growing at 3.4% yearly. Moreover, over 80% of Kenyans earn their income informally, making them ineligible for traditional mortgage products.
This has led to 98% of housing developments targeting the upper-middle and high-end market, leaving a vast majority without affordable housing options.
Blockchain as the Solution
NSE’s collaboration with Cardano and Empowa represents a revolutionary approach to tackling Kenya’s housing crisis.
By creating RWA tokens for affordable housing, the initiative will help raise capital by attracting investment through tokenized assets to meet the substantial annual financial requirement of $2.5 billion.
RWA tokens are digital tokens that represent physical items and can be managed and traded on a blockchain. In real estate, tokenized properties allow investors to buy and sell property shares.
By leveraging blockchain’s features such as security and transparency, it will be easy to track ownership, cash flow, and asset returns, ensuring all transactions are transparent and verifiable.
The initiative also promises significant benefits for the Cardano community. It will showcase Cardano’s blockchain capabilities in addressing crucial socio-economic issues.
Furthermore, integrating Cardano into mainstream finance will increase its adoption and enhance credibility and scalability for complex applications. Providing affordable housing finance to informal market participants will improve their economic stability and quality of life.
Moreover, the project will generate valuable insights and best practices for using Cardano in financial markets, which benefits the broader blockchain community.
Empowa is known for its contribution to affordable housing, blockchain technology, and fintech in Africa. The firm has demonstrated success through its Empowa payment application built on Cardano, which manages rent-to-own cash flows for affordable housing projects across Africa. This system currently supports 18 developers in 8 countries, tracking $8.5 million worth of housing.
Bottom Line
The partnership with NSE seeks to demonstrate the real-world use of Cardano blockchain technology in addressing critical socio-economic issues including affordable housing financing.