Affordable Housing with Financing Solutions

Man in a suit holding a miniature house

By Towfiqu Barbhuiya on Unsplash

Affordable Housing with Financing Solutions
Focused on Low and Middle Income Families
SectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Real Estate
Business Model Description

Invest in B2C models engaged in building affordable homes for low to middle-income families with a focus on sustainability. Affordability is made possible through innovation or practical location (SEZ), as well as with the provision of financial assistance (loans, subsidies and tax exemptions).

Worldbridge Homes Co. Ltd. (WHC), founded in 2017, is a subsidiary of the Worldbridge Group of Companies. It is engaged in affordable housing development in partnership with RGC to provide sustainable/livable communities with high quality, affordable homes, and quality and reliable amenities to serve low and middle-income earners, particularly the civil servants.

In 2015, WHC and Straits Construction Singapore Pte. Ltd, signed a memorandum of understanding (MoU) on affordable housing with the RGC. WHC is developing 2,457 housing units, priced from USD25,000-30,000. Loans are offered with a down payment policy, requiring 5% of the price in 1st month; while balance can be paid in 24 months at no added interest. [9][10][11]

Arakawa Co.,ltd (Arakawa), founded in 2008 by Japanese investors, is a housing development company. After developing Bellevue Serviced Apartments, they are currently engaged in construction of a USD 70 mn (12) project for affordable housing complex of 2960 units, with price ranging from USD 28,000-61,200. (13)

First Finance PLC (FF), founded in 2006, provides long-term home and medium-term home improvement loans to underserved low-middle income households and families who do not have access to formal commercial lending in Phnom Penh. It also offers home equipment loans.

FF lends 80% of the home’s value to borrowers to repay over a term of upto 20 years, at a competitive rate, allowing the client to have upto 3 co-borrowers (siblings).

Expected Impact

Affordable housing solutions to ensure improved well-being, reduced inequalities and urban planning support by expanding projects in city-outskirts.

Indicative ReturnDescribes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
10% - 15% (in IRR)
Investment TimeframeDescribes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Long Term (10+ years)
Market SizeDescribes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
> USD 1 billion
Average Ticket Size (USD)Describes the USD amount for a typical investment required in the IOA.
> USD 10 million
Direct ImpactDescribes the primary SDG(s) the IOA addresses.
No Poverty (SDG 1) Clean water and sanitation (SDG 6) Sustainable Cities and Communities (SDG 11)
Indirect ImpactDescribes the secondary SDG(s) the IOA addresses.
Reduced Inequalities (SDG 10) Decent Work and Economic Growth (SDG 8) Good health and well-being (SDG 3)
Sector Sources
  • (1) Sachs et al. (2021). The Decade of Action for Sustainable Development Goals. Sustainable Development Reprot 2021. Cambridge: Cambridge University Press. (2) Hin, P. (2018). Rising Demand for Cheap Housing. (3) World Bank. (2018). Urban Population--Cambodia. (4) Business and Sustainable Development Commission. (2017). Better Business, Better World. (5) Benson, E. (2020). 4 Facts about Housing and Homelessness in Cambodia. (6) Mendez, W. (2020). 10 Facts about Housing Poverty in Cambodia. (7) Asian Development Bank. (2014). Country Partnership Strategy. (8) Hin, P. (2021). Affordable Housing Project to be Completed by End of 2021.
IOA Sources
  • (9) Whitehead, J. (2016). More Affordable Housing Projects Underway in Phnom Penh, Says Worldbridge and Natural Lucky. (10) Worldbridge. (2021). Worldbridge Homes.,clinic%2C%20a%20kindergarten%20school%2C%20and (11) Construction Property. (2018). World Bridge Homes Adjusts Low-Cost Housing Project Payment Policy. (12) Hin, P. (2021). Low Cost Homes 'Ready 2022'. The Phnom Penh Post. (13) Sekai Property. (2022). Arakawa Residence. (14) World Bank. (2017). Quality of overal infrastructure.,2017 (15) MOP 2021 (16) Royal Government of Cambodia. (2018). Cambodia Sustainable Development Goals (CSDGs) Framework (2016-2030). (17) United Nations Environment Programme. (2021). 5 Ways to Make Buildings Climate Change Resilient. (18) Buttmann, V. (2017). The Clash of Rural-Urban Migrants and Real Estate Investors on Phnom Penh's Housing Market--Prospects for Garment Workers. (19) GGGI. (n.a.) Sustainable Affordable Housing in Phnom Penh.