Sikadan Homes: providing accommodation for low-income households

Via our platform, you can find an accommodation at your own convenience.

Access to decent and adequate housing is often considered as a basic human right. The World Bank Group estimates that by 2030, three billion people, equal to 40 percent of the world’s population, will need new housing units. With about 90 percent of Africa’s population unable to buy a house or even qualify for a mortgage, there is a need for a shift towards formal rental housing as a critical option to solve the housing crisis in Africa. Justice Offei Jr., a petroleum engineer by profession, found a solution to solve this problem. His startup, Sikadan Homes is a proptech startup in Accra,  the capital of Ghana, offering renters a more convenient and affordable property rental service with an incorporated monthly payment option. Justice is also an Orange Corners Alumnus and won an OCIF fund in early 2020. Orange Corners HQ interviewed Justice to know more about his aspirations. 

I see entrepreneurship as a tool to solve societal problems. However, entrepreneurship is not for everyone. Before you see yourself as an entrepreneur, you should be able to tell yourself that you have a solution for a problem in the market

What does Sikadan mean?

“Sika- means money and dan- means house in our local language Twi here in Ghana. Sikadan literally means house full of money. We launched Sikadan two and half years ago and we are currently a team of 10 people. . We provide a proptech service, an online market website offering real estate across the country. We are using a facility management model, financial solutions and technology to provide affordable housing for the low income population in Ghana, which are those who cannot spend more than 30 percent of their income on rent. We offer feasible solutions by eliminating any interest and loan interest elements when renting a home. Currently, we have over 300 applications and we are able to support close to 25 percent of these people.

It is difficult for low-income households to find housing. Sikadan tries to fill the gap in the market and links house seekers with house owners

In Ghana, landlords do not accept monthly payment of rent. As a result, tenants have no option than to pay rent advance of a year or more. Most of the renters in the low-income bracket end up borrowing from family, friends and banks to pay their rent advance. The loan interest ends up making their rent more expensive. What especially surprised me was a research that a German company did in the housing sector in Ghana in 2016. One of the intriguing findings was that only 1 percent of the Ghanaian population could afford the cheapest mortgage.  Which means that the other 99 percent are looking into the other markets to find a place to rent. This finding validates the problems that we have identified in the market: mortgages are too expensive. 

Low-income households cannot qualify for a mortgage from the bank and are forced to find a house in a different way. It is difficult for low-income households to find housing. Sikadan tries to fill the gap in the market and links house seekers with house owners. Our technology platform is simply allowing people to have convenient ways of exploring available accommodations. We are also focusing on Sikadan Smart Rent, a non-loan renting policy that enables renters to pay monthly. It is the current innovative product of SIKADAN Homes.

“I see entrepreneurship as a tool to solve societal problems

Why did you find it important to set up this platform? 

“There is no platform in place in Ghana for people to seek affordable accommodations without asking around or going through town to look for one. That takes a lot of effort and energy. Most of the investors focus on building luxurious houses for high-end people. That is why, with our platform, you can look for a place at your convenience using your smartphone. You can apply for a viewing for a fee, which is refundable once you end up renting the place. This refundable service fee is not common with the other proptech platforms in Ghana. All of them charge you a service fee, which is non-refundable. We hope with this service to provide low-income population housing that is accessible and safe to use. 

Because of OCIF, our impact has significantly increased. Our online traffic, for example, has increased by 60 percent, rising from 500 visits to more than 1000 visits per month.

Housing services in Ghana are not properly organised and you may fall in the hands of an agent, who might run away with your money. If someone rents from Sikadan, you know you are dealing with a legal entity that will ensure that money is properly paid to the right person. We also help to hand over the keys to you and help relocate if you need that service.”

Justice Offei Jr. during the Orange Corners Programme

Regarding Orange Corners, what did you think of the OCIF programme?

“We are grateful that we were selected for the funding support and loan. We were one of the three companies that were selected and received 30 percent grant and 70 percent loan with a 5% interest rate. You cannot find such a low interest rate anywhere else across the continent. Because of OCIF, our impact has significantly increased. Our online traffic, for example, has increased by 60 percent, rising from 500 visits to more than 1000 visits per month. Also our average monthly revenue increased by 90%, the difference between the time not being under OCIF funding and the time receiving OCIF funding. 

Nonetheless, we have more challenges to resolve. One of the suggestions we made in our impact report was giving a higher percentage of grants compared to loans, for example 50% grants and 50% loans.

Funding is very critical for startups here, especially in this time of enormous difficulty

You told us you were a petroleum engineer. Why did you decide to become an entrepreneur?

“Entrepreneurship is my passion. I sacrificed my profession for starting a business. So I really wanted to make sure that what I do is worth doing. I want to help more and more low-income households so they don’t have difficulties anymore with finding housing. We hope to increase our impact by offering smart rents, low-interest mortgages and we are starting to think about building flats and social housing schemes. I want to make people realize that not much attention is being paid to affordable housing and that is why I am very driven to make the most out of my project. I don’t see myself stopping in the near future because I believe that Sikadan can only increase its impact and expand in Ghana and Africa.”

Access to decent and adequate housing is often considered as a basic human right

What would you suggest to other aspiring entrepreneurs?

“I see entrepreneurship as a tool to solve societal problems. However, entrepreneurship is not for everyone. Before you see yourself as an entrepreneur, you should be able to tell yourself that you have a solution for a problem in the market. You should also be passionate about what you want to do. If you’re not passionate about what you are doing, you will give it up, because it’s a rollercoaster journey and you will be facing too many setbacks. Where there are highs, there are lows. Once you are starting a business, you will see it yourself and you will be tested.

I read in a report that out of every five businesses that started only one is successful in the next 10 months. This tells you how people can easily give up after a year of running their own business. Don’t move into that profession out of ignorance. Do your homework and work for what you want. When things are tough, it is your passion that makes you persist and will help you not give up.”

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Orange Corners Innovation Fund (OCIF) provides fund managers with capital to invest in early-stage startups. It is an additional programme to the Orange Corners incubation programmes. It aims to stimulate innovation and improve access to finance for starting entrepreneurs in Africa, the Middle East and Southeast Asia. 

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