Announcement of Morocco Acts to Relieve Acute Housing Shortage on September 18, 1989

FOR IMMEDIATE RELEASE 'Norld Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.* Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 90/12 Contact: Fawzi Rihane (202) 473-2675 MOROCCO ACTS TO RELIEVE ACUTE HOUSING SHORTAGE WASHINGTON, September 18, 1989 -- Morocco will relieve severe housing shortages in urban areas with a project designed to improve low-income groups' access to home-construction finance. The World Bank has approved two loans totaling $80.5 million to support the project. A loan of $77.5 million will finance a line of credit to Credit Immobilier et Hotelier (CIH), Morocco's primary mortgage lender, to support lending for low- and moderate-cost housing. CIH will use $0.5 million of the loan to increase its knowledge of the housing-supply system, develop savings and credit services and adapt its management-information and audit systems to new depository and lending activities. The line of credit of $77 million will finance construction loans to private and public developers, land-development loans, individual home- construction loans and mortgage loans. The credit is expected to finance about 15,000 low-cost houses over a two-year period. The Moroccan government will use a second loan of $3 million to carry out institution-building programs for the Urban Directorate of the Ministry of the Interior and the Housing Directorate of the Ministry of Housing. These programs will upgrade ministerial departments' capabilities to facilitate land and housing development. The project will have a positive environmental impact by helping to control urban sprawl and discouraging unsafe housing development. Morocco's urban population expanded from 29 percent in 1960 to 45 percent in 1986. The annual urban growth rate is 4.5 percent, compared to the national rate of 2.6 percent. The country's current population is about 24 million. The country's housing shortage is particularly acute for poor households. Overcrowding, shared dwellings and shanty areas have had a negative impact on health and sanitary conditions and economic development. The World Bank loan is for 20 years, including five years' grace, with a variable interest rate, currently 7.73 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.25 percent on the undisbursed balance. Note: Money figures are expressed in U.S. dollar equivalents.