Housing Finance in Lesotho


This profile is also available in French here.

To download a pdf version of the full 2019 Lesotho country profile, click here.

Lesotho is a southern African country with a population of just over 2 million. The mountainous country is surrounded entirely by the Republic of South Africa. Since the country’s independence in 1966, there has been considerable movement of the population from rural to urban centres – particularly to the capital city of Maseru. With limited natural resources, Lesotho’s proximity and integration with South Africa has been key for sustaining its economy.

Lesotho’s financial sector is largely dominated by commercial banks, which offer mortgages or indirectly support housing-related loans. There are only two microfinance institutions that provide housing-related loans. These loans are payable at relatively high interest rates. A large proportion of the population, including salary or wage earners, cannot access affordable and adequate housing because bank requirements are often too stringent to be met. Lesotho’s high unemployment rate of 27.3% further makes housing unaffordable to many.

It is estimated that 98 711 dwellings would need to be constructed by 2025 to meet Lesotho’s demand for housing. As is common to the region, private property developers are focussed on the high-end market. The underserved, poorer market segment have no alternatives to informal housing in the periphery of the city.

Lesotho has a dynamic land tenure system dominated by both customary and statutory systems. It now takes 9 days to register a title, while the construction permit process has been automated for greater efficiency. However, the country’s real estate sector is not regulated, and this has often translated into inflated property prices on the market.

Adequate housing is a national imperative for the government of Lesotho. This is found in the National Housing Policy Implementation Strategy 2018-2022.

Ongoing reviews of financial regulations, along with housing and land policies are expected to support economic growth and create opportunities for property ownership. The high number of registered microfinance institutions could further create room for more innovative housing finance options for the lower income population.

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 2019 edition, which has up-to-date profiles for 55 African countries.

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