Housing Finance in Botswana


For the French version of this country profile, click here.

To download a pdf version of the full 2018 Botswana country profile, click here.

Botswana is a country in Southern Africa, with a population of just over two million people. It mainly depends on mining and natural resources, especially diamonds and tourism.Inflation remained low in 2017, finishing the year at 3.0 percent, which is the lower end of the Bank of Botswana’s inflation objective range of 3.0 to 6.o percent.

Two major developments in 2017 were the launch of the Vison 2036, which succeeds Vison 2016, and the launch of the Botswana Sustainable Development Goals (SDGs). Vision 2036 is aligned to the SDGs and both documents aim for a Botswana with decent, affordable housing and economic opportunities for all.

Access to finance in Botswana is relatively high by African standards but considered low globally. According to the third FinScope survey undertaken in Botswana in 2014, 68 percent of the population was financially served, using either formal and/or informal products, while 50 percent of the population was formally banked, and 24 percent was financially excluded (not using either formal or informal financial products).

Botswana has a large microlending industry, which provides short- to medium-term loans, mostly to those employed in the public sector. Although there are cases when loans from microlenders have been used to  purchase  land, such loans have generally been used to finance consumer spending, education expenses and emergencies.

Botswana has a large pensions sector, with total assets equivalent to approximately 45 percent of GDP, almost as large as those of the banking sector. Approximately 62 percent of pension fund assets are held offshore. Pension-backed housing loans are legally permissible; however, the industry is rather conservative and in practice does not provide members with housing loans or allow third party loans secured by pensions.

Botswana has several policies and acts for land management and administration. The main policies are the National Settlement Policy (1998), the National Policy on Housing (2000), Revised National Policy for Rural Development (2002) and Land Policy (2015). The only recent Act related to land and housing is the Sectional Titles Act (2003), which provides for the division of buildings into sections for the acquisition of separate ownership of building blocks.

Botswana has a relatively stable, well-managed economy that has shown significant growth over the past few years. Finance for self-built housing still offers significant prospects for growth, due to this being the preferred method of building, even among the middle and higher income categories. Mortgage lending has been increasing, and while there is limited demand given low income levels, it also has potential for growth, given the introduction of new programmes such as the implementation of SDGs and the eleventh National Development Plan (NDP 11).

The state has recognised the need to reform in key areas, such as land administration, and is also meeting the costs of land servicing in many areas.At present, access to subsidised housing is determined by various rationing mechanisms, but there is a need for a more efficient mechanism to deliver targeted housing subsidies.

Find out more information on the housing finance sector of Botswana, including key stakeholders, important policies and housing affordability:

Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2018 edition, which has up-to-date profiles for 54 African countries.

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