How Ghanaian company Cofundie is building affordable housing through crowdfunding

The new crowdfunding platform Cofundie has been making headlines in Ghana and even in international publications lately. You might be asking yourself why, given that there are already many online crowdfunding platforms.

However, the company not only provides crowdfunding investment opportunities to users, but also specializes in providing affordable housing for people. The company prides itself on being environmentally friendly by using low-cost and/or recyclable materials.

The humanitarian factors that inspired the creation of Cofundie

There were many reasons for creating this startup. Chukwuemeka Ndukwe, co-founder and CEO of Cofundie, said his idea came from observing the private real estate sector in Africa. Ndukwe noticed that most real estate financing on the continent went to luxury and commercial projects, which left a huge gap in the real estate sector and ignored the housing sector. Africa has a housing gap of 56 million units, 25 million of which are in West Africa.

Ndukwe also added that the problem will only get worse over time, citing the World Bank’s projection that Africa’s population will double (to 4.85 billion people) by 2050. As a result, the housing shortage could reach an unprecedented 100 million units, creating an unprecedented housing crisis.

Cofundie is trying to address the deficit by offering investors funding for housing projects that will not only build the necessary housing, but also do so at a low cost. This is so because the company is committed to using inexpensive building materials such as adobe bricks, old containers, rammed earth, and polystyrene boards. By using these materials, the company will reduce the cost of housing construction and build it faster. However, the housing will be environmentally friendly, which may attract a type of investor who cares about the environment and only invests in such projects.

Market factors that led to the creation of Cofundie

Judging from what Ndukwe said, his company is concerned about the current housing situation, so it has come up with a rather libertarian solution – working with local councils on a crowdfunding campaign. In addition to the humanitarian message, Ndukwe also admitted that the investment opportunities of his startup were one of the reasons for its creation.

As mentioned before, most of the financing in Africa is for luxury and commercial projects, and investment opportunities are only open to those who can afford to spend big bucks. Another gap in the real estate market is a boon for this startup, which addresses this problem and solves it by allowing customers to invest small amounts of money, thus offering low-risk investments. This is thanks to the company’s business model, which divides construction projects into individual parts that can be purchased.

How startups work

Ndukwe made it clear to potential investors that the company offers the security they want. He promised that the slot machines sold are backed by real physical assets, and he also revealed that investors’ data is safe with them as it will not be outsourced to any third party.

Ndukwe then described on his website the process that housing projects must go through before becoming investment deals. He stated that in order for a project to end up on their website, it first undergoes extensive background checks on potential developers. Then, of course, the company also reviews deals with available contractors. Finally, approved developers and deals move on to the final stage of the process, which is review by the Investment Committee. Ndukwe stated that their acceptable interest rate is less than 5%.

Ongoing Projects

The startup has started crowdfunding its first 20 affordable homes. They chose Apollonia City, a new and rapidly developing community in the Greater Accra area that aims to provide Ghanaians with an opportunity to escape the hustle and bustle of the capital, with plenty of parks and other recreational activities. Apollonia City has attracted many investors who have realized the opportunity to invest in the development of new suburban communities. No wonder Apollonia City has become the largest urban developer in Ghana.

Apparently, this is why Cofundie decided to start operations by financing these 20 beds. According to Ndukwe, they have already raised 20% of the required amount. He promised that once implemented, the project will provide “the cheapest beds in Accra” due to the use of unconventional building materials.

Cofundie will also be launched in Nigeria sometime in 2021.