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Pay-Small-Small: A Rural Housing Development and Finance Scheme to Combat Rural Poverty and Underdevelopment in Cameroon

National Times – Over the past three decades, the government of Cameroon has introduced a myriad of policies, from the ring roads, rural electrification, water and hygiene, and the millennium development goals programs to combat poverty and underdevelopment in rural parts of the country, but the issue of poor housing in rural areas has been largely overlooked.

While more than 80% of Cameroonians are employed in agriculture and the more than 73% live in rural areas, the state of housing and accommodation in rural parts of Cameroon is terribly underdeveloped. The significance of the problem goes beyond the inequality created due to the disparity of the housing conditions between rural and urban parts of the country, it touches on another key issue, the economy is losing billions from this neglect.

Most of us know that most people in villages earn between FCFA  500,000 -5 million a year. There are people who earn even more, but they are few. With that yearly income brackets, most residents in villages are not able to save, and consequently will take decades to finance decent housing projects. As a shortcut people choose to build and live in uncompleted buildings, or just rent till they die.

In a series of five articles commissioned for the National Times news, I will propose a solution on how the government can support and implement a rural housing development and finance scheme, through a public-private development initiative I shall call, the pay-small-small rural housing development scheme.

This project can entail a private developer agreeing with the government to build a certain number of houses in a particular rural area. If successfully implement the project will create over 800,000 jobs in Cameroon in ten years, add billions to the country’s economy, and provide accommodation to more than 100,000 families in rural areas in 10 years.

In this first article for the series, I focus on the financial arrangements that can make such a scheme successful. As most economists will agree, the foundation of a successful project is the availability and apt management of capital.

First, the goal of a rural housing development scheme will be to provide low-cost affordable housing to villagers or Cameroonians living in rural communities. The scheme won’t be free. Rural residents will pay for the houses, but they will pay in yearly installments, meaning they will pay-small-small. It it will cost between FCFA 7 to 10 billion to provide 5000 houses to rural residents.  The good thing is they will repay the funds, with some interest. So it is a win-win for developers, the government, and rural communities.

There can be three finance schemes for the pay-small-small program. First, the house owner, government, investor scheme. Here the house owner pays part of the deposit for their houses, the government pays another part, and the investor covers for the rest. Meanwhile the house owners repays the government and the investor (developer), over a period of time.

The second model can be house-owner, banks, and government. In this model, the house owner pays a deposit either with their banks or seek a loan from the bank to pay for the house and then repay the bank and the government.

In the third model, the house owner-investor, the house owner pays for the house either in full or installments to the developer before the construction works starts.

Whatever model is selected, the prices for the houses should range from FCFA 7 to 20 million. This is a decent sum to build and paint a two to three bedroom house in Cameroon. House owners should then be given between 10-20 years to repay the loans. That means an average property owner should be paying from FCFA 500,000 to 2 million each year. Giving the average income in most rural areas in Cameroon, these are reasonable amounts of money that most farmers can afford in a year.

The government does not give these funds to the house owners. The money is giving to developers after signing an agreement with prospective house owners. Basically, the developer secures the funding, the owners agree to repay the full value of the loans with fixed interest rates of 2-3%.

Prospective  house owners can be asked to pay a deposit of 10% or more before an agreement is established to build their houses. To promote the scheme, can agree to make a fixed deposit on each house, to be repaid by the developer, once the house owner full repays the house loan.

Most developers and constructors in Cameroon do not have billions in their account to undertake a housing development scheme of pay-small small type, not withstanding the housing crisis in rural areas. As such, the government deposit will be a significant incentive for profit-seeking companies. However, the government can request that the developers refund or return the funds after the owners pay the full amount for the house. Tax subsidies or loan guarantees can also be provided to the developers to allure them into the project.

One of the key challenges regarding the finance model of this project, which I will address in the third article, will be the problem of fraud and accountability. To address some of these problems, briefly put here, the government will control the number of players, mainly developers allowed to participate in the scheme. Strong regulations can be put into place to address poor quality and compensation of victims. Second pilot projects should be created in designated rural communities to test the loan model, the quality of the houses, the sustainability of the project, and community participation and satisfaction.

One central question I have been asked by some villagers or developers I have spoken to is , will they be building new villages or new houses in old villages?  The development schemes should not be limited to the development of new streets or villages, the government should encourage the renovation or re-building of houses in existing or already inhibited spaces. Because of lack of in Cameroon, building houses in existing villages, will be cheaper than building new villages. Besides, adaption and reintegration into houses built in existing villages would be easier. I will address this problem fully in a subsequent article for the series.

Regarding those who default to repay their loans, the property can be sold, with the owner reimbursed his total payments to the property, while the developer retains the left over. Of course, the issue is more complex, and cannot be comprehensively addressed here.

There are five reasons why the government should embark on such a project. First, there are significant economic benefits. For example, depending on the scale of the project, it will create thousands of jobs in rural communities. In addition, while addressing the problem of shortages of decent accommodation in rural areas, the new houses will provide avenues for poor and medium income earners in rural areas to save, buy properties, and join the formal economy, thereby contributing to the country’s GDP and size of the formal economy.

Besides the economic benefits, such a project will go to the heart of addressing housing problems in rural areas. Such a scheme can also be used by government schools or other institutions to acquire decent accommodation or facilities for their users.

Finally, one of the biggest problems with housing in Cameroon is the absence of big indigenous developers or construction companies. The rural housing finance and development scheme can be an opportunity for the country to develop such companies and skills.

A pay-small small rural housing finance and development scheme will go a long way in helping Cameroon to address its rural housing shortages and provide decent houses to those who can not afford to sponsor housing projects without loans. The pay-small-small project can be a public-private initiative that can address the housing shortages in Cameroon, as well as make significant contribution to the country’s economy.


The rural development scheme is part of a series of five articles commission by National Times to contribute to debate of rural poverty and neglect in Cameroon. Articles in the series are published weekly, every Saturday. Writers and experts are invited to contribute to the series. To contribute contact us on

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