Housing Finance in Mozambique


This profile is also available in French here.

To download a pdf version of the full 2019 Mozambique country profile in English or Portuguese, click here.

Mozambique is a southern African, Lusophone country with a coast along the Indian Ocean. It is bordered by South Africa, Zimbabwe, Tanzania, eSwatini and Malawi. The economy depends extensively on capital-intensive, mineral resource (such as aluminium, coal and gas) projects, which dominate the country’s export basket. This leaves the economy highly vulnerable to commodity price fluctuations. Its natural resource endowment has also not translated into broad-based economic growth and sectoral diversification. Mozambique is amongst one of the poorest countries in the SADC region.

With a number of its cities in coastal proximity, Mozambique is vulnerable to severe weather conditions. The impacts of Cyclones Idai and Kenneth, which hit in early 2019 have prompted the need to build resilience against climate change.

Mozambique has made substantial progress on financial inclusion indicators, with the Ministry of Finance, central Bank and FSD Mozambique driving the inclusion strategy.

While some banks consider non-salary income when assessing risk, interest rates on mortgage loans are still high (between 16 and 22.5 percent). Construction and renovation loans are offered by some banks, at higher interest rates.

The government is the largest institutional investor in affordable housing. Its fund offers housing and construction finance though public-private partnerships. However, most housing construction is funded through short and medium-term consumer loans. Interest rates on consumer loans turn out lower than those offered by micro-finance institutions.

Not enough housing projects cater to Mozambique’s low and middle class. These groups rely on self-construction, which is done informally and incrementally.

The cost of local construction materials in urban areas is high. The price of cement is particularly prohibitive. The construction sector also lacks an effective regulatory system and enforcement mechanisms.

More than half of Mozambique’s population resides in rural areas. Development policies are therefore less concentrated on urban centres, despite rapid urbanisation. There is considerable opportunity for housing development and the provision of facilities outside of city centres, which are more conducive for affordable housing projects.

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

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