Housing Finance in Lesotho


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

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

Lesotho is a mountainous, landlocked country surrounded by the Republic of South Africa, with an estimated population of 2 263 253 people in 2018. The population growth rate increased from 0.68 to 1.2 percent in 2016.

 Lesotho has a limited banking sector. Access to housing finance is mainly mortgage finance, with approximately 400 loans a year provided to borrowers who earn above LSL1 285 (US$900) a month. This sector is regulated by the Central Bank of Lesotho and is dominated by Standard Lesotho Bank Limited (SLB), First National Bank (FNB), Nedbank Lesotho and Lesotho Postbank (LPB).

The Lesotho Housing Profile 2016 revealed that approximately 70 percent of Basotho households earn less than LSL1 000 (about US$ 70) a month. Housing to household expenditure ratio is 4:1.  Seventy percent of the total urban housing stock in Lesotho is provided through the informal channels and rental affordability is estimated at 25 to 30 percent of household expenditure.

Although the right to adequate housing is reflected in the Constitution of Lesotho, the government has not yet fulfilled its mandate to facilitate the realization of this right. The Lesotho  Housing Profile (2015)  estimated that a total of 99000 dwellings (or 170000 rooms) will have to be constructed by 2025 to meet the demand for housing in Lesotho.  An estimated 5 200 dwellings or 9000 rooms a year are needed to meet the annual urban housing demand

Property markets are skewed towards potential buyers in the middle to high income category and only a few middle to high income earners rely on real-estate agents. The real-estate sector is not formally regulated, resulting in a lack of data and inflated prices.

There is still an opportunity for property market investment due to the high levels of demand, particularly for the middle to higher income groups.

The ongoing legislative and policy reforms coupled with the current developments, which are concentrated mostly in Maseru, leaves other districts open for investments in the housing sector. Microfinance institutions continue to increase the number of clients receiving housing microfinance services and this helps provide diversified innovative housing options targeted at lower income earners.

Find out more information on the housing finance sector of Lesotho, 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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