Housing Finance in Malawi

Overview

This profile is also available in French here.

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

Malawi is situated in southern Africa, at the border of Zambia, Tanzania and Mozambique. The landlocked country is predominantly agricultural, and largely rural. The country ranks amongst the world’s least developed economies. Historically, Malawi has been constrained by macroeconomic instability, a low industrial base, poor infrastructure development, rapid population growth, low health and education levels and environmental degradation. Malawi’s is also highly dependent on donor flows form the World Bank, IMF and other institutions.

Two major banks account for almost half of the banking sector’s total asset base. Lending rates in Malawi are generally high. Four of the nine commercial banks provide mortgages and on average mortgage interest rates are approximately 20 percent. However, the cost of borrowing is expected to fall with declining inflation.

Low access to formal housing finance and credit characterises the Malawian market. This is largely explained by low income levels, high levels of informal employment and affordability of mortgages, including stringent terms and conditions attached to mortgage finance.

Malawi has largely leveraged micro-lending as an alternative to formal mortgages, particularly for the low income segment of the market. Microfinance institutions are an essential part of the housing delivery ecosystem.

The high cost of building materials and electricity supply generally affect the delivery of affordable housing by developers just as Malawi Housing Corporation (MHC). Estimates point to 21 000 housing units needed annually for the next 10 years to meet Malawi’s housing backlog.

Policies in recent years have sought to create a more conducive environment for the property market to thrive. This includes efforts to increase the supply of electricity, reducing interest rates and new land legislations. This may potentially attract much needed foreign investment into the housing sector.

Find out more information on the housing finance sector of Malawi, 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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Neighbouring Countries Mozambique Tanzania Zambia
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