Challenges of affordable housing finance in IDB member countries using Islamic modes

Housing is one of the basic needs. It is linked with many other sectors of
the economy and any change in it affects the whole economy and some
time the whole world - a case of US subprime crisis. Promoting this sector
consequently promotes employment, consumption and investment in the
economy.

Although housing is of tremendous importance for the families, society
and for the economy at large, the fact remains that all the developing
countries including the IDB member countries have been facing severe
shortage of housing. Using UN-Habitat (2006) methodology, indicative
estimates suggest that the IDB member countries need around 8.2 million
houses per year to accommodate poor and low income urban people. This
translates into nearly 22,421 dwellings per day in order to accommodate
the expected urban population growth. MENA requires 3.2 million housing
units per year followed by ASIA (2.7 million), Sub-Sahara Africa (1.9
million) and Countries in Transition (CIT) (0.4 million). This projected
figure of housing needs is expected to increase (at an average of 2.83
percent annually) along with the increase in the urban population in IDB
member countries.