Housing Finance in Mozambique

Overview

This profile is also available in French here.

To download a pdf version of the full 2020 Mozambique country profile in English or Portuguese, click here.

Mozambique has a a population of approximately 30 million[1] of which more than 50 percent[2] live below the poverty line. With the impact of COVID-19, the Central Bank (Bank of Mozambique) expects an annual growth rate of under 2.2 percent (registered in 2019)[3] but does expect a recovery from 2021.

Despite the expansion of financial services and the number of banks operating in the country, financial inclusion remains a challenge. Only the middle and high income households, which account for approximately five percent[4] and are mostly made up of government and bank employees, can afford housing loans. The majority of families build their own houses incrementally, and this is always dependant on financial availability.[5] Microbanks and microfinance institutions have higher rates than commercial banks. The country therefore has limited options for housing loans.

Real estate activities, including some public private partnerships dedicated to the construction of houses, are concentrated in the capital, and housing is mostly available to middle and high income households. The Fund for Housing Promotion (Fundo de Fomento a Habitação – FFH) is the only government institution that promotes housing solutions for the low income segment. In March 2020 the government launched a new housing project called Renascer (Reborn), focusing on the low income segment. The goal of the project is to build 300 houses in rural and urban areas of Maputo, Nampula and Cabo-Delgado provinces.[6] The private sector is planning to build 25 000 affordable houses in Maraza, Beira. The construction process is already underway, and it is being managed by the Beira Municipal Council.

The Mozambican housing market is growing and will continue to grow with the ongoing natural gas project in Palma, Cabo-Delgado, which will attract several investors. There are considerable business opportunities in the low, middle and high income segments. The low income housing segment is filled with opportunities because of high demand. However, it is still vastly ignored when compared to the high demand in all cities across the country. It is also an opportunity for commercial banks to contribute, offering competitive interest rates to both contractors and borrowers.

 

[1] Arantes, E. (2019). Poverty rate soared in Mozambique – O País newspaper. 21 October 2019. Club of Mozambique. https://clubofmozambique.com/news/poverty-rate-soared-in-mozambique-o-pais-145005/  (Accessed 1 August 2020).

[2] National Statistics Institute. (2020). http://www.ine.gov.mz (Acessedo 30 July de 2020).

[3] Bank of Mozambique. (2020). Financial Stability Report. 30 June 2020. http://www.bancomoc.mz/fm_pgTab1.aspx?id=379 (Accessed 28 July 2020). Pg.14.

[4] Allen, C. and Johnsen, V. (2008). Mozambique and the constraints of the housing market development and financing. http://housingfinanceafrica.org/app/uploads/Moz_Portuguese.pdf (Accessed 29 July 2020). Pg. 24.

[5] Allen, C. and Johnsen, V. (2008). Mozambique and the constraints of the housing market development and financing. http://housingfinanceafrica.org/app/uploads/Moz_Portuguese.pdf (Accessed 29 July 2020). Pg. 1 and pg. 24.

[6] Fund for Housing Promotion. (2020). Official launch of project Renascer.23 March 2020.https://ffh.gov.mz/noticias-eventos/lancamento-oficial-do-projecto-renascer (Accessed 17 August 2020).

 

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


Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2020 edition, which has up-to-date profiles for 55 African countries.

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